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entitled 'Free Trade Agreements: U.S. Partners Are Addressing Labor
Commitments, but More Monitoring and Enforcement Are Needed' which was
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
November 2014:
Free Trade Agreements:
U.S. Partners Are Addressing Labor Commitments, but More Monitoring
and Enforcement Are Needed:
GAO-15-160:
GAO Highlights:
Highlights of GAO-15-160, a report to congressional requesters.
Why GAO Did This Study:
The United States has signed 14 FTAs, liberalizing U.S. trade with 20
countries. These FTAs include provisions regarding fundamental labor
rights in the partner countries. USTR and DOL, supported by State, are
responsible for monitoring and assisting FTA partners' implementation
of these provisions.
GAO was asked to assess the status of implementation of FTA labor
provisions in partner countries. GAO examined (1) steps that selected
partner countries have taken, and U.S. assistance they have received,
to implement these provisions and other labor initiatives and the
reported results of such steps; (2) submissions regarding possible
violations of FTA labor provisions that DOL has accepted and any
problems related to the submission process; and (3) the extent to
which U.S. agencies monitor and enforce implementation of FTA labor
provisions and report results to Congress. GAO selected CAFTA-DR and
the FTAs with Colombia, Oman, and Peru as representative of the range
of FTAs with labor provisions, among other reasons. GAO reviewed
documentation related to each FTA and interviewed U.S., partner
government, and other officials in five of the partner countries.
What GAO Found:
Partner countries of free trade agreements (FTA) that GAO selected-—
the Dominican Republic-Central America-United States Free Trade
Agreement (CAFTA-DR) and the FTAs with Colombia, Oman, and Peru-—have
taken steps to implement labor provisions and other initiatives to
strengthen labor rights. For example, U.S. and foreign officials said
that El Salvador and Guatemala—-both partners to CAFTA-DR-—as well as
Colombia, Oman, and Peru have acted to change labor laws, and Colombia
and Guatemala have acted to address violence against union members.
Since 2001, U.S. agencies have provided $275 million in labor-related
technical assistance and capacity-building activities for FTA
partners, including $222 million for the four FTAs GAO reviewed.
However, U.S. agencies reported, and GAO found, persistent challenges
to labor rights, such as limited enforcement capacity, the use of
subcontracting to avoid direct employment, and, in Colombia and
Guatemala, violence against union leaders.
Since 2008, the Department of Labor (DOL) has accepted five formal
complaints-—known as submissions—-about possible violations of FTA
labor provisions and has resolved one, regarding Peru (see figure).
However, for each submission, DOL has exceeded by an average of almost
9 months its 6-month time frame for investigating FTA-related labor
submissions and issuing public reports, showing the time frame to be
unrealistic. Also, union representatives and other stakeholders GAO
interviewed in partner countries often did not understand the
submission process, possibly limiting the number of submissions filed.
Further, stakeholders expressed concerns that delays in resolving the
submissions, resulting in part from DOL's exceeding its review time
frames, may have contributed to the persistence of conditions that
affect workers and are allegedly inconsistent with the FTAs.
Five Labor Submissions Accepted by DOL Regarding Free Trade Agreements:
[Refer to PDF for image: illustrated table]
FTA: Bahrain;
Year accepted: 2011;
Alleged violations: Violation of right to freedom of association,
discrimination;
Status: Open.
FTA: Dominican Republic;
Year accepted: 2012;
Alleged violations: Human trafficking, forced labor, retaliatory
firing of workers for union activities;
Status: Open.
FTA: Guatemala;
Year accepted: 2008;
Alleged violations: Violation of right to freedom of association,
violation of rights to organize and bargain collectively, unacceptable
work conditions;
Status: Open.
FTA: Honduras;
Year accepted: 2012;
Alleged violations: Violation of right to freedom of association,
violations of rights to organize and bargain collectively, child labor;
Status: Open.
FTA: Peru;
Year accepted: 2011;
Alleged violations: Failure to comply with labor laws related to
collective bargaining;
Status: Closed as resolved (2012).
Source: GAO analysis of Department of Labor (DOL) information.
GAO-15-160.
[End of figure]
2009, GAO found weaknesses in the Office of the U.S. Trade
Representative's (USTR) and DOL's monitoring and enforcement of FTA
labor provisions. In the same year, the agencies pledged to adopt a
more proactive, interagency approach. GAO's current review found that
although the agencies have taken several steps since 2009 to
strengthen their monitoring and enforcement of FTA labor provisions,
they lack a strategic approach to systematically assess whether
partner countries' conditions and practices are inconsistent with
labor provisions in the FTAs. Despite some proactive steps, they
generally rely on labor submissions to begin identifying,
investigating, and initiating steps to address possible
inconsistencies with FTA labor provisions. According to agency
officials, resource limitations have prevented more proactive
monitoring of all FTA labor provisions. As a result, USTR and DOL
systematically monitor and enforce compliance with FTA labor
provisions for only a few priority countries. USTR's annual report to
Congress about trade agreement programs provides limited details of
the results of the agencies' monitoring and enforcement of compliance
with FTA labor provisions.
What GAO Recommends:
DOL should reevaluate its submission review time frame and better
inform stakeholders about the submission process. USTR and DOL should
establish a coordinated strategic approach to monitoring and
enforcement labor provisions. USTR's annual report to Congress should
include more information of USTR's and DOL's monitoring and
enforcement efforts. The agencies generally agreed with the
recommendations but disagreed with some findings, including the
finding that they lack a systematic approach to monitor and enforce
labor provisions in all FTAs. GAO stands by its findings.
View [hyperlink, http://www.gao.gov/products/GAO-15-160]. For more
information, contact Kimberly Gianopoulos at (202) 512-8612 or
gianopoulosk@gao.gov.
[End of section]
Contents:
Letter:
Background:
Selected Countries Have Taken Steps, with U.S. Assistance, to Address
FTA Labor Commitments and Other Labor Initiatives but Have Limited
Enforcement Capacity:
One of Five Labor Submissions Has Been Resolved, but Reporting
Deadlines and Limited Public Awareness of the Process Present Problems:
U.S. Agencies Provide Limited Monitoring, Enforcement, and Reporting
on FTA Labor Provisions:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Reported Violence against Trade Unionists in Colombia and
Guatemala:
Appendix III: U.S. Monitoring of Implementation of Other Labor
Initiatives:
Appendix IV: Status of Labor Submissions:
Appendix V: Comments from the Office of the U.S. Trade Representative:
Appendix VI: Comments from the Department of Labor:
Appendix VII: GAO Contact and Staff Acknowledgments:
Figures:
Figure 1: Labor-Related Technical Assistance Administered by U.S.
Agencies under Selected Free Trade Agreements (FTA) and All Other FTAs:
Figure 2: U.S. DOL Labor Submission Process:
Figure 3: Free Trade Agreement (FTA) Labor Submissions Accepted by DOL
as of July 2014:
Figure 4: Murders of Unionists in Colombia, 2003-2013:
Figure 5: Timeline and Status of Labor Submission Regarding Bahrain:
Figure 6: Timeline and Status of Labor Submission Regarding the
Dominican Republic:
Figure 7: Timeline and Status of Labor Submission Regarding Guatemala:
Figure 8: Timeline and Status of Labor Submission Regarding Honduras:
Figure 9: Timeline and Status of Labor Submission Regarding Peru:
Abbreviations:
AFL-CIO: American Federation of Labor and Congress of Industrial
Organizations:
CAFTA-DR: Dominican Republic-Central America-United States Free Trade
Agreement:
CICIG: International Commission against Impunity in Guatemala:
DOL: Department of Labor:
DPPS: División de Protección de Personas y Seguridad:
DRL: Bureau of Democracy, Human Rights, and Labor:
ENS: Escuela Nacional Sindical:
FTA: free trade agreement:
ILO: International Labour Organization:
INL: Bureau of International Narcotics and Law Enforcement:
NAFTA: North American Free Trade Agreement:
NGO: nongovernmental organization:
SENA: Servicio Nacional de Aprendizaje:
SINAUT: National Union of Tax Administration Workers:
SUNAUT: National Superintendency of Tax Administration:
TPSC: Trade Policy Staff Committee:
UNP: Unidad Nacional de Protección:
USAID: U.S. Agency for International Development:
USTR: Office of the U.S. Trade Representative:
[End of section]
United States Government Accountability Office:
GAO:
441 G St. N.W.
Washington, DC 20548:
November 6, 2014:
The Honorable George Miller:
Ranking Member:
Committee on Education and the Workforce:
House of Representatives:
The Honorable Sander M. Levin:
Ranking Member:
Committee on Ways and Means:
House of Representatives:
As global economic competition has intensified, concerns in the United
States that competitors' labor practices may disadvantage U.S. workers
and producers have become acute. Recent U.S. free trade agreements
(FTA) contain a provision requiring partner countries to commit to
respect internationally accepted core labor rights, such as freedom of
association and the right to bargain collectively.[Footnote 1] FTAs
phase out barriers to trade with particular countries or groups of
countries and contain rules and other commitments to improve access
for services and investment. FTAs represent a major component of U.S.
trade policy, as the United States has signed 14 FTAs with 20
countries covering, according to the Department of Commerce, more than
35 percent of all U.S. imports--$2.3 trillion in 2013.[Footnote 2] The
status of the implementation of FTA labor provisions is of particular
relevance, as the United States is negotiating the Trans-Pacific
Partnership--a trade agreement with 11 Pacific Rim countries, in which
the administration is seeking to negotiate high-standard labor
provisions. The effective implementation of labor provisions is also
relevant as Congress considers renewal of the President's lapsed Trade
Promotion Authority, most recently in effect from 2002 through 2007.
[Footnote 3]
In 2009, we reported significant challenges connected with the
enforcement of labor provisions in four FTAs.[Footnote 4] We also
reported that the U.S. agencies responsible for the monitoring and
implementation of labor provisions in the FTAs in many cases engaged
in only minimal oversight and assistance with FTA partner countries to
address these challenges. We recommended that the Department of Labor
(DOL), in consultation with other agencies, initiate regular contact
with all FTA partners' ministries of labor to review implementation of
FTA labor provisions and to develop ongoing priorities and plans for
technical cooperation on labor matters. We also recommended that the
Office of the U.S. Trade Representative (USTR), in cooperation with
other agencies, prepare updated plans to implement, enforce, monitor,
and report on compliance with and progress under the FTAs' labor
provisions and that these plans should reflect ongoing trade
developments, be provided to Congress, and be summarized in USTR's
annual trade agreements report. In 2012, both agencies were taking
actions to address the recommendations.[Footnote 5]
As the main U.S. point of contact for all FTAs, USTR has general
oversight responsibility for commitments in FTAs. DOL is responsible
for monitoring partner countries' labor conditions and compliance with
FTA labor provisions, addressing complaints regarding violations of
these provisions, and providing technical assistance. The Department
of State (State) supports USTR and DOL in discharging their
responsibilities and also monitors labor conditions in each partner
country. In some instances, the U.S. Agency for International
Development (USAID) supports partner countries in implementing FTA
labor obligations and initiatives by administering technical
assistance projects, carried out by USAID's implementing partners. In
2009, USTR announced that it would take steps jointly with DOL and
State to improve interagency cooperation; proactively monitor the
implementation of labor provisions; and address identified problem
areas, including foreign practices that would constitute violations of
FTA requirements. Furthermore, the President's 2014 Trade Policy
Agenda indicates that the administration will focus on implementation
of the numerous agreements into which the United States has entered
and that the United States will work with key trading partners around
the world to address specific labor issues.
You asked us to assess the current status of the implementation of FTA
labor provisions as well as the United States' and trade partner
countries' responses to related challenges, such as reported violence
against unionists in some partner countries. This report examines the
following (see appendix I for a detailed description of our scope and
methodology):
1) steps that selected partner countries have taken, and U.S.
assistance they have received, to implement FTA labor provisions and
other labor initiatives and the reported results of such steps;
2) complaints--known as submissions--about possible violations of FTA
labor provisions that DOL has accepted and any problems related to the
submission process; and:
3) the extent to which USTR, DOL, and State monitor and enforce
partner countries' implementation of FTA labor provisions and report
results to Congress.
In addition, appendix II describes reported violence against labor
unionists in selected FTA partner countries as well as steps that the
countries have taken to address such occurrences. Appendix III
describes U.S. agencies' efforts to monitor implementation of other
labor initiatives.
For our review, we selected four FTAs--the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR), the United
States-Colombia Trade Promotion Agreement (Colombia FTA), the United
States-Oman Free Trade Agreement (Oman FTA), and the United States-
Peru Trade Promotion Agreement (Peru FTA). We also visited five
partner countries--El Salvador and Guatemala, both of which are CAFTA-
DR partners; Colombia; Oman; and Peru. We selected these FTAs and
countries in part because of the extent of known labor issues in each
country; because of the timing of the FTAs' entry into force; and to
reflect regional dispersion across Central America, South America, and
the Middle East.[Footnote 6] In addition, we selected the Colombia and
Peru FTAs in part because the labor chapters in those agreements
contain provisions reflecting labor language as delineated in the May
10, 2007, Bipartisan Trade Agreement on Trade Policy, popularly known
as the May 10th Agreement.[Footnote 7] However, the results of our
review of these selected FTAs and partner countries cannot be
generalized to all FTAs and partner countries.
To address our objectives, we reviewed relevant documents, including
the labor chapters of the four selected FTAs; labor submissions
received by DOL; labor rights reports and trade agreement reports
compiled by U.S. agencies, international organizations, and FTA
stakeholders; and documents pertaining to U.S. monitoring and
enforcement plans. In addition, we reviewed documentation related to
labor conditions in partner countries that we obtained from partner
country governments as well as from business associations, labor
unions, the International Labour Organization (ILO), and nonprofit
organizations. We interviewed representatives of these organizations;
relevant foreign government officials; and U.S. agency officials in
Colombia, El Salvador, Guatemala, Oman, and Peru during fieldwork in
those countries. We also interviewed U.S. agency representatives in
Washington, D.C., and Geneva, Switzerland.[Footnote 8] We collected
data on U.S. funding for labor assistance programs in FTA partner
countries from 2001 to 2013 and on reported violence against unionists
in Colombia--the only selected FTA partner country with such data--and
we assessed these data's reliability by interviewing agency officials
knowledgeable about the data sources and by tracing the data to source
documents. We determined that the data were sufficiently reliable for
the purposes of describing U.S. assistance for implementation of labor
provisions in FTA partner countries and describing general trends in
reported violence against unionists in Colombia. (See appendix I for
further details of our scope and methodology.)
We conducted this performance audit from May 2013 to November 2014 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
FTA Labor Provisions and Other Initiatives to Address Labor Concerns:
The current and prior administrations have expressed concerns that
poor labor standards in FTA partner countries may affect workers in
the United States and other parts of the world, incentivizing a global
"race to the bottom" that unfairly distorts global markets and
prevents U.S. businesses and workers from competing on a level playing
field. According to DOL, to address such concerns, each FTA signed in
the past decade, including those we selected, contains a "labor
chapter" that differs in detail across the FTAs but generally includes
labor provisions, establishes points of contact for labor matters, and
provides a recourse mechanism for matters arising from the labor
provisions.[Footnote 9] The provisions in the labor chapters of the
four FTAs that took effect most recently generally reflect the trade
policy template created by the May 10th Agreement.[Footnote 10]
* In FTAs that entered into force from January 2004 through January
2009, including CAFTA-DR and the Oman FTA, the labor chapter contains
a provision that a party shall not fail to effectively enforce its
labor laws, through a sustained or recurring course of action or
inaction, in a manner affecting trade between the parties.[Footnote
11] Under CAFTA-DR and the Oman FTA, matters related to this
obligation are the only matters under the respective labor chapters
for which parties can seek recourse through dispute settlement that
may result in possible fines and sanctions.[Footnote 12] These FTAs
also contain a provision whereby parties commit to "strive to ensure"
that the labor rights enumerated in the respective labor chapter are
protected by their laws; however, matters arising under this provision
do not have recourse through the dispute settlement chapter of the
respective FTA.[Footnote 13]
* In FTAs that entered into force after January 2009, including the
Colombia and Peru FTAs,[Footnote 14] the labor chapter includes
language echoing the May 10th Agreement that obligates each partner to
adopt and maintain in its statutes, regulations, and practices certain
fundamental labor rights as stated by the ILO.[Footnote 15] Although
the text of the respective FTAs' labor chapters varies, this language
generally relates to, for example, the rights to freedom of
association and collective bargaining and the elimination of
compulsory or forced labor. The labor chapters of these FTAs also
obligate the parties not to fail to effectively enforce these labor
laws in a manner affecting trade between the parties. Pursuant to the
labor chapters of these FTAs, if consultations fail, the parties can
seek to resolve matters arising under the labor chapters by pursuing
recourse through the respective FTAs' dispute settlement chapters,
which may result in possible fines and sanctions.[Footnote 16]
In addition, other labor initiatives--one known as the White Paper
[Footnote 17] and the other titled Colombian Action Plan Related to
Labor Rights (Labor Action Plan)[Footnote 18]--were developed in the
context of CAFTA-DR and the Colombia FTA, respectively.[Footnote 19]
* White Paper. Before Congress enacted implementing legislation for
CAFTA-DR,[Footnote 20] a group of vice ministers responsible for trade
and labor in the partner countries developed the White Paper to
address labor concerns in Central America and the Dominican Republic.
The White Paper detailed six areas of focus and included
recommendations to enhance the implementation and enforcement of labor
standards and to strengthen the region's labor institutions.[Footnote
21] According to DOL, the U.S. government did not participate in
preparing or negotiating the White Paper's recommendations. The ILO
Verification Project, funded by DOL, was created to monitor
implementation of the White Paper commitments and released
verification reports every 6 months between 2007 and 2010.
* Labor Action Plan. Colombia and the United States agreed in 2011 to
the Labor Action Plan, in furtherance of Colombia's commitment to
protect internationally recognized labor rights, prevent violence
against labor leaders, and prosecute the perpetrators of such
violence. The plan listed nine issue areas to strengthen labor rights
that Colombia was required to address before the FTA could receive
congressional approval.[Footnote 22] USTR and DOL are jointly
responsible for monitoring Colombia's ongoing progress in fulfilling
these requirements.
U.S. Agencies' Responsibilities Related to Monitoring Implementation
of FTA Labor Provisions:
USTR, DOL, and State have key responsibilities related to monitoring
partner countries' implementation of FTA labor provisions. These roles
involve both discrete and shared responsibilities that require both
formal and informal coordination. USAID has provided funding for
cooperative projects to improve labor capacity.
* USTR. The U.S. Trade Representative is the President's principal
adviser and spokesperson on trade and has lead responsibility for
negotiating trade agreements, including FTAs, as well as for
developing and coordinating U.S. trade policy and issuing policy
guidance related to international trade functions. USTR is responsible
to the President and Congress for administering the trade agreements
program, including periodic reporting to Congress as required.
[Footnote 23] USTR is also responsible for coordinating the
administration's activities to create a fair, open, and predictable
trading environment by identifying, monitoring, enforcing, and
resolving the full range of international trade issues. According to
USTR, this includes asserting U.S. rights; vigorously monitoring and
enforcing bilateral and other agreements; and promoting U.S.
interests, including labor interests, under FTAs.
* DOL. DOL's Bureau of International Labor Affairs is responsible for
monitoring implementation of FTA labor provisions for all FTAs. The
bureau's Office of Trade and Labor Affairs is designated as the point
of contact for implementation of the labor provisions of the FTAs as
well as for the labor cooperation mechanisms. Before congressional
approval and implementation of an FTA, DOL's responsibilities include
preparing reports for Congress, in consultation with USTR and State,
about the partner country's labor rights protections and child labor
laws and the FTA's potential effect on employment in the United
States. After an FTA enters into force, DOL's responsibilities include
receiving, reviewing, and acting on any public complaint submitted
about the partner's compliance with FTA labor obligations
(submissions).[Footnote 24] Both before and after an FTA is
implemented, DOL is responsible for assisting the partner country as
needed--for example, planning, developing, and pursuing cooperative
projects related to labor matters--to strengthen the partner country's
capacity to promote respect for core labor standards.
* State. State is responsible for supporting USTR and DOL in
implementing and monitoring FTAs. State's Bureau of Democracy, Human
Rights, and Labor (DRL) coordinates State's in-country labor officers,
who are tasked with carrying out regular monitoring and reporting and
day-to-day interaction with foreign governments regarding labor
matters. State annually produces Country Reports on Human Rights
Practices, which includes information about countries' labor
practices. In addition, State participates with USTR and DOL in the
USTR-led interagency team that negotiates FTA labor provisions,
contributes critical input to the research and analysis of reports
produced by DOL, and provides technical assistance funding to
strengthen some countries' labor capacity. Because USTR and DOL do not
maintain a presence in other countries, they often rely on State for
outreach, monitoring, and reporting activities related to FTA labor
provisions.
* USAID. USAID administers technical assistance programs to address
labor-related matters. USAID administers trade-capacity-building
programs globally in both FTA and non-FTA partner countries. In
addition, during the FTA negotiations, USAID provides USTR input on
draft FTA text as well as input on possible trade-capacity-building
programs to address labor-related issues.
Selected Countries Have Taken Steps, with U.S. Assistance, to Address
FTA Labor Commitments and Other Labor Initiatives but Have Limited
Enforcement Capacity:
Each of the FTA partner countries that we selected for our review has
taken steps to strengthen labor rights pursuant to its FTA with the
United States, and some of these countries have also implemented other
labor initiatives outside the FTA framework. The U.S. government has
provided some technical assistance to help FTA partner countries meet
their labor commitments. However, stakeholders reported that
limitations in partner countries' capacity to enforce labor laws cause
gaps in labor protections to persist.
Selected Countries Have Taken Steps to Implement FTA Labor Commitments
and Other Labor Initiatives, Including Strengthening Labor
Institutions:
CAFTA-DR: El Salvador and Guatemala:
El Salvador and Guatemala, the CAFTA-DR countries we selected for our
review, have both taken steps to implement labor initiatives
responding to their FTA commitments and areas of focus identified in
the White Paper. According to the ILO, and as reported by DOL, these
countries have addressed these areas of focus by implementing changes
to improve labor protections, such as increasing the number of labor
inspectors and increasing the number of judges and courts that hear
labor cases.
El Salvador. According to DOL and ILO verification reports, El
Salvador increased its Ministry of Labor's enforcement budget by about
120 percent from 2005 to 2010, leading to an increase in the number of
labor inspectors during the same period as well as increases in both
the number of inspections conducted and the number of fines imposed on
employers.[Footnote 25] Ministry of Labor officials reported that with
the increase in size and budget, which resulted from the White Paper
recommendations, the ministry is now able to accommodate workers'
requests for workplace inspections and labor inspectors can issue
fines for violations not addressed by employers.[Footnote 26] In
addition, according to officials from the Supreme Court in El
Salvador, the labor courts have created a comprehensive statistical
system to track labor issues identified in the White Paper, and unions
have successfully advocated for legislation that, if passed, would
speed labor case reviews and allow plaintiffs to participate more
actively.
Guatemala. Guatemala has taken some steps to address labor conditions
in accordance with commitments outlined in an Enforcement Plan that
the United States and Guatemala agreed to in 2013 as a result of
negotiations to resolve a labor case initiated through a labor
submission to DOL.[Footnote 27] The actions that the plan calls for
include, among others, increasing the budget for labor law enforcement
at the Ministry of Labor and verifying employer compliance with court
orders.[Footnote 28] Officials from the Ministry of Labor reported
improvements in labor rights implementation in response to the
Enforcement Plan. For example, the number of labor inspections rose
from about 5,000 nationwide in 2011 to about 36,800 nationwide in
2013. Also, according to ministry officials, the ministry now conducts
labor inspections regularly, rather than in response to complaints,
and has increased its legal education requirements for labor
inspectors, to further fulfill its Enforcement Plan commitments.
Colombia:
According to USTR, Colombia has taken steps to implement labor
protection commitments outlined in the Labor Action Plan, such as
reforming the criminal code to establish criminal penalties for
employers that undermine the right to organize and bargain
collectively, enacting legal provisions and regulations prohibiting
the use of temporary service agencies to circumvent labor rights, and
reforming the criminal justice system. USTR and DOL have reported that
the Colombian government took concrete steps and made meaningful
progress under the Labor Action Plan, which fulfilled the condition
for advancing the FTA to Congress and resulted in the FTA's entering
into force in May 2012. The government's steps included securing
legislation to establish a separate labor ministry and expanding its
labor inspectorate by hiring additional inspectors. Additionally, USTR
and the Colombian Ministry of Labor reported that the government
enacted a series of laws and ministerial decrees that expanded labor
protections as a result of the Labor Action Plan. According to USTR
and the Colombian Ministry of Labor, these laws and decrees include,
for example, legislation to establish criminal penalties, including
imprisonment, for employers that undermined the right to organize and
bargain collectively as well as new provisions and regulations to
prohibit and sanction with significant fines the misuse of
cooperatives[Footnote 29] and other employment relationships that
undermine workers' rights.[Footnote 30]
Oman:
Oman has taken steps to implement labor protections that have allowed
for unionization and collective bargaining. Officials from Oman's
Ministry of Manpower--the ministry responsible for labor affairs--
reported that Oman's interest in entering into a free trade agreement
with the United States helped lead to the introduction of labor
reforms, including the establishment of unions. According to USTR, in
order to meet its commitments made in connection with the FTA, Oman
has enacted a number of labor law reforms including, among others, a
royal decree in 2006 that established the right to organize labor
unions, allowed for collective bargaining, prohibited the dismissal of
workers for union activity, guaranteed the right to strike, and
guaranteed unions the right to practice their activities freely and
without interference from outside parties. According to union and
Ministry of Manpower officials we met with in Oman, the General
Federation of Trade Unions held its first election in 2010 and served
as the starting point for the union movement in Oman. The federation
serves as an umbrella organization representing workers from various
sectors and, according to union officials, represents about 200
company-level unions and one sector-level union, established in 2013
in the oil and gas sector.
Peru:
According to USTR, Peru committed to steps to implement labor
protection commitments in the context of FTA negotiations with the
United States. During our fieldwork, officials at Peru's Ministry of
Labor told us that Peru recently established a new labor inspection
regime and that the ministry has focused on improving inspections in
the workplace. For example, in 2013, according to Ministry of Labor
officials, the ministry took action to centralize authority for labor
inspections and help ensure that inspectors are applying the same
criteria across the country. Ministry of Labor officials also reported
that the ministry took steps to improve labor inspections by
modernizing its information systems to allow for digital record
keeping, with technical assistance provided by USAID. According to
USAID, as a result of these programs, the time required to adjudicate
labor cases has decreased from 2 years to 6 months. Additionally,
according to a 2007 U.S. House of Representatives, Committee on Ways
and Means report, in order to bring Peruvian labor laws into alignment
with the obligations under the FTA, the government of Peru took steps
to change Peru's legal framework governing temporary employment
contracts, subcontracting and outsourcing contracts, the right of
workers to strike, recourses against unit-union discrimination, and
workers' right to organize. Ministry of Labor officials reported that
the ministry has progressively increased the number of labor
inspectors, in connection with the commitments Peru made during the
FTA negotiation, to double its labor inspectorate. As of September
2013, the ministry reported having about 400 labor inspectors on staff
nationally.
U.S. Agencies Have Provided Technical Assistance to Help FTA Partner
Countries Meet Labor Commitments, with Largest Amounts for CAFTA-DR:
From fiscal year 2001 through fiscal year 2013, the U.S. government
provided a combined total of about $275 million in labor-related
assistance for all FTA partner countries.[Footnote 31] All CAFTA-DR
countries, Colombia, and Peru received a combined total of about $222
million in labor-related technical assistance and capacity-building
activities since the passage of implementing legislation for these
FTAs. In contrast, the U.S. government provided about $53 million in
labor-related assistance for all other FTA partner countries during
the periods since those FTAs were implemented.[Footnote 32]
Figure 1 shows the labor-related technical assistance that U.S.
agencies provided under CAFTA-DR and the Colombia, Oman, and Peru FTAs
during the periods beginning, respectively, with the year that
Congress passed the FTA's implementing legislation and ending in 2013.
Figure 1 also shows labor-related technical assistance that U.S.
agencies provided from 2001 through 2013 under all other FTAs that
entered into force in or after 2001.
Figure 1: Labor-Related Technical Assistance Administered by U.S.
Agencies under Selected Free Trade Agreements (FTA) and All Other FTAs:
[Refer to PDF for image: stacked vertical bar graph]
FTA partner country: CAFTA-DR (2005-2013);
State: $75.2 million;
USAID: $32.8 million;
DOL: $62.3 million;
Total: $170.4 million.
FTA partner country: Colombia (2011-2013);
State: $23.4 million;
USAID: $0;
DOL: $0.5 million;
Total: $23.9 million.
FTA partner country: Oman (2007-2013);
State: $0.01 million;
USAID: $0;
DOL: $0;
Total: $0.
FTA partner country: Peru (2001-2013);
State: $19.1 million;
USAID: $8.4 million;
DOL: $0;
Total: $27.5 million.
FTA partner country: All other FTA Countries (2001-2013);
State: $27.6 million;
USAID: $18.9 million;
DOL: $6.7 million;
Total: $53.1 million.
Source: GAO analysis of DOL, State, and USAID data. GAO-15-160.
CAFTA-DR: Dominican Republic-Central America-United States Free Trade
Agreement;
DOL: Department of Labor;
State: Department of State;
USAID: U.S. Agency for International Development.
Notes: Time periods for the data shown for CAFTA-DR and the Colombia,
Oman, and Peru FTAs each begin with the year that the respective FTA's
implementing legislation was passed by Congress, before the FTA
entered into force. Data for "All other FTAs" exclude the only FTAs
that entered into force before 2001--the U.S.-Israel Free Trade
Agreement (1985) and the North American Free Trade Agreement (1994).
[End of figure]
Totals for projects that DOL administered under CAFTA-DR include
projects that Congress funded through appropriations to DOL for
technical assistance to reduce child labor as well as projects that
State's Bureau of Western Hemisphere Affairs funded through transfers
to DOL from State's Economic Support Fund and Development Assistance
account.
Data shown exclude funding that DOL provided for a regional labor-
related technical assistance project in Oman and Bahrain in 2006.
According to DOL officials, data showing country-specific funding for
regional projects are not available.
Data shown for Colombia include $500,000 that State provided for
promotion of labor rights.
CAFTA-DR:
CAFTA-DR's six partner countries have received the largest amounts of
U.S. assistance for labor-related projects undertaken pursuant to the
FTA or independent of the FTA. From 2005, when the CAFTA-DR
implementing legislation was passed by Congress, through 2013, the
U.S. government provided about $170 million for such projects.
According to DOL, this amount included funding appropriated by
Congress to fund labor-capacity-building activities as well as funds
appropriated to DOL for child labor technical assistance projects to
assist these partner countries in addressing labor-related priorities
outlined in the White Paper.[Footnote 33] According to DOL officials,
DOL, State, and USAID established an interagency group to develop FTA
labor-related projects in consultation with USTR and CAFTA-DR partner
governments and to allocate funding among these projects, with funds
transferred from State. DOL reported that from 2005 to 2013, these
three U.S. agencies administered more than 20 technical assistance
projects in support of the White Paper's priority issue areas.
Colombia:
U.S. technical assistance for labor-related projects in Colombia
totaled about $24 million from 2011, when the Colombia FTA
implementing legislation was enacted, through 2013. U.S. agencies
provided $9 million of that amount for projects to combat child labor
and about $13 million to address workers' rights. DOL has also
provided in-kind resources, sending a staff person with labor
expertise to support the Colombian government in taking initial steps
to implement the Labor Action Plan. The United States is currently
funding multiple labor-related projects in Colombia, including State's
award of about $500,000 to the ILO for the promotion of core labor
rights and DOL's award of about $7.8 million for the ILO office in
Colombia.
Oman:
Oman has not received U.S. technical assistance specifically for labor-
related projects since the FTA was enacted. According to State, the
United States is not involved in any labor-capacity-building or labor-
related assistance programs in Oman because of the Omani government's
reluctance to accept foreign assistance. However, officials at Oman's
Ministry of Manpower told us that the United States has provided
information and advice on supporting unions and the role of unions in
the economy and has expressed support of ongoing labor reforms,
including the establishment of unions.
Peru:
U.S technical assistance for labor-related projects in Peru totaled
about $27.5 million from 2007, when the Peru FTA implementing
legislation was enacted, through 2013. Of that amount, $13 million was
dedicated to combat child labor, with the remainder dedicated to labor-
capacity-building and education projects. USAID officials stated that,
for example, the agency expended $3.3 million over a 3-year period to
target labor issues. Of this amount, $2.7 million was granted to the
Solidarity Center, a labor nongovernmental organization (NGO)
affiliated with the American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO), to strengthen union negotiation
capacity, and $600,000 was granted to an implementing partner--Nathan
Associates--for improving information systems, providing training for
labor inspectors, and training judges on the implementation of labor
laws.
Stakeholders Reported Limited Enforcement Capacity and Gaps in Labor
Rights in Selected Partner Countries:
CAFTA-DR: El Salvador and Guatemala:
El Salvador. Stakeholders we met with during our fieldwork in El
Salvador identified concerns related to the enforcement of labor
rights. Further, State and DOL reports show that workers are often
unable to benefit from the legal rights afforded in the labor laws.
For example, according to NGO officials, although labor courts have
improved their ability to process cases, court decisions are often not
enforced. U.S. officials stated that the Ministry of Labor's increases
in its budget and number of labor inspectors have not improved the
labor inspectorate's effectiveness. According to Ministry of Labor
officials, although the ministry's labor inspectors can fine employers
for labor law violations, the ministry does not collect the fines and
workers must petition the labor courts to enforce the penalties.
Moreover, according to an ILO official, although the government of El
Salvador has greatly reduced the amount of time that the courts take
to accept a case, resolution of most labor disputes still takes 2 to 4
years. Officials from the Supreme Court in El Salvador told us that
about 51 percent of labor court sentences are not enforced, primarily
because the plaintiffs do not have the funds required to continue the
claims. Union and NGO officials we met with in El Salvador emphasized
their concerns over enforcement, stating that because of the length of
time the courts take to adjudicate labor cases, workers often take
buyouts from the company and drop the cases. State's 2013 Human Rights
Report echoes these concerns. For example, the report states that in
2013, the government of El Salvador did not always effectively enforce
the laws on freedom of association and the right to collective
bargaining, and that legal remedies and penalties are ineffective.
Guatemala. According to stakeholders we met with during our fieldwork
in Guatemala, as well as State reports, concerns related to the
enforcement and application of labor rights persist. According to
USTR, Guatemala has taken steps to address labor reforms outlined in
the Enforcement Plan, but additional steps are needed, including
passing legislation providing for an expedited process to sanction
employers that violate labor laws and implementing a mechanism to
ensure payments to workers in cases where enterprises have closed.
[Footnote 34] Additionally, according to USTR, Guatemala will need to
demonstrate that the legal reforms it has undertaken and still needs
to undertake are being implemented effectively and are leading to
positive changes.[Footnote 35] Union representatives reported concerns
related to freedom of association--specifically, that union leaders
have been offered monetary compensation to resign from their jobs and
to influence other workers against joining the union. Union officials
we met with also noted that workers have been terminated for their
union affiliation or for not disbanding unions. State's 2013 Human
Rights Report echoed these concerns, stating that the government of
Guatemala did not effectively enforce legislation on freedom of
association, collective bargaining, or antiunion discrimination.
Further, according to this report, as a result of inadequate
allocation of budget resources and inefficient legal and
administrative processes, the relevant government institutions did not
effectively investigate, prosecute, and punish employers who violated
freedom of association and collective bargaining laws, and the
institutions did not reinstate workers illegally dismissed for
engaging in union activities.[Footnote 36]
Colombia:
Stakeholders we met with in Colombia identified concerns related to
the enforcement of labor rights and not benefiting from rights
afforded in the labor laws. According to USTR, the government of
Colombia has made meaningful progress under the Labor Action Plan, but
work remains to build on this progress and address remaining and new
challenges.
* According to USTR, the collection of fines for labor violations
remains problematic. USTR and DOL have reported that although
Colombia's national training and apprenticeship system, Servicio
Nacional de Aprendizaje (SENA), is responsible for collecting fines
for labor violations, until recently SENA has been barred from
collecting fines from companies that filed a judicial appeal.[Footnote
37] According to a joint USTR-DOL statement, as of April 2014, SENA
was authorized to hold monetary payment as collateral payment from
businesses, pending the outcome of the judicial appeal of their fines,
but had not yet begun to exercise this authority. Additionally,
although the Ministry of Labor increased the number of inspectors,
labor unions and NGOs reported that this action has not resulted in
more effective inspections or improved working conditions.
* USTR has reported that new forms of abusive contracting remain
problematic to the protection of labor rights in Colombia. For
example, according to USTR, although the number of illegal
cooperatives has dropped, many employers have shifted to various forms
of subcontracting, including entities known as simplified stock
companies, to avoid direct employment relationships.[Footnote 38] ILO,
NGO, and labor union officials we met with described this form of
subcontracting as a legal loophole that is used to undermine workers'
rights. According to union officials, a law passed by the Colombian
government in 2013 prohibiting the misuse of cooperatives was also
intended to increase formalized employment and encourage companies to
hire workers directly instead of as temporary labor.
State's 2013 Human Rights Report noted that the Colombian government
generally enforced applicable labor laws and took steps to increase
the enforcement of freedom-of-association laws. However, the report
identified weaknesses in labor protections in Colombia, echoing
concerns expressed to us by labor union and NGO representatives,
related to labor inspections, collecting fines for labor violations,
and employers' use of outsourcing contracts.[Footnote 39]
Oman:
Ministry of Manpower and union officials we met with in Oman reported
that collective bargaining and freedom of association are allowed by
law and largely respected. However, State has raised concerns about
the enforcement of labor law among Oman's foreign worker population.
State's 2013 Human Rights Report notes that Oman's Ministry of
Manpower effectively enforces the labor law as it applies to Omani
citizens but has not effectively enforced regulations related to
working conditions and hours for foreign workers.
Peru:
Despite steps that the government of Peru has taken to address labor
conditions, union and NGO officials we met with reported that
enforcement of labor laws remains weak and labor conditions have not
improved in certain respects. According to State, Peru's labor laws
place a 5-year limit on the continuous renewal of short-term labor
contracts not leading to permanent employment in most sectors of the
economy. However, State's 2013 Human Rights Report notes that a sector-
specific law covering nontraditional export sectors such as apparel
exempts employers from this 5-year limit and allows them to hire
workers through indefinite series of short-term contracts. Union
officials we met during our fieldwork also reported poor labor
conditions in Peru's nontraditional export sectors, which these
officials described as not affording the same labor rights as other
sectors in the economy.[Footnote 40] More generally, according to NGO
officials, Peru's large informal sector makes it difficult for the
government to enforce labor rights, because informal companies, which
are not registered with the government and therefore are not subject
to labor inspections, typically do not follow labor laws.
State's 2013 Human Rights Report also identifies continuing labor
concerns in Peru's nontraditional export sectors, such as the effect
of the use of temporary service contracts and subcontracting on
workers' freedom of association. State's report also notes that in
2013, penalties for violations of freedom of association and
collective bargaining were rarely enforced, the judicial process was
prolonged, and employers were seldom penalized for dismissing workers
involved in trade union activities. In addition, union officials whom
we met with stated that Peru's agricultural law allows for workers to
be paid less than the legal minimum wage and to be continuously hired
on temporary contracts for 2-to 3-month periods. These officials
stated that this limits workers' ability to collectively bargain and
exercise freedom of association, because of fear that if they join a
union, their contracts will not be renewed.
One of Five Labor Submissions Has Been Resolved, but Reporting
Deadlines and Limited Public Awareness of the Process Present Problems:
DOL has accepted five of six labor submissions--that is, formal
complaints alleging that FTA labor provisions had been violated--that
it has received since 2008[Footnote 41] and has closed one submission
as resolved. However, DOL did not meet its original deadlines for
reviewing and reporting on any of the submissions, exceeding the
established 6-month submission review time frame by an average of
about nine months and possibly delaying resolution of the submissions.
Stakeholders whom we interviewed in the selected five partner
countries generally expressed a lack of awareness or understanding of
DOL's submission process, which may have limited the number of
submissions filed. Moreover, stakeholders we interviewed expressed
concerns about delays in resolving labor concerns detailed in the
submissions for Guatemala and Honduras.
DOL Announced Its Process for Receiving and Evaluating Submissions in
2006:
According to DOL, FTA labor provisions establish official processes
for receiving submissions from interested organizations that believe a
trading partner is not fulfilling its labor commitments. In the United
States, DOL generally receives and reviews submissions made under the
labor chapters of each trade agreement. DOL issued procedural
guidelines pertaining to this function via publication of a Federal
Register notice in 2006.[Footnote 42] The guidelines contain deadlines
and substantive criteria for acceptance and investigation of
submissions. For example, DOL shall determine whether to accept a
submission within 60 days and is to consider, among other things,
whether it contains statements that, if substantiated, would
constitute a failure by the other party to comply with its commitments
under an FTA. If DOL determines that the circumstances require, the 60-
day timeframe can be extended. According to DOL, its decision to
review a public submission does not indicate any determination as to
the validity or accuracy of the allegations contained in the
submission; the submission's merit is addressed in the public report
that follows DOL's review and analysis. DOL officials noted that
although DOL has responsibility for investigating submissions, USTR,
DOL, and State work together to engage diplomatically to address
concerns.
Figure 2 illustrates DOL's submission process, including the
established time frames for accepting and reviewing submissions.
Figure 2: U.S. DOL Labor Submission Process:
[Refer to PDF for image: process illustration]
Department of Labor (DOL) receives a submission (via e-mail, hand
delivery, mail, or facsimile transmission) and notifies the submitter
and the FTA partner country that is the subject of the submission.
DOL determines within 60 days whether to accept the submission for
review, after examining the submission and any supporting
documentation to ensure that the submission meets criteria specified
in the Federal Register.
If DOL accepts the submission for review, DOL promptly notifies the
submitter, the FTA partner country, and other appropriate persons and
publishes a Federal Register notice of its determination, a statement
of why the review is warranted, and the terms of the review;
* If DOL declines to accept the submission, DOL promptly notifies the
submitter in writing, giving the reasons for declining.
DOL reviews the submission and supporting documents and publishes a
Federal Register notice inviting interested parties to submit any
additional or supplemental information.
Unless DOL determines that circumstances require an extension of its
review period, DOL issues a public report within 180 days, summarizing
its proceedings and presenting any findings and recommendations,
including any recommendation that the United States request
consultations with the FTA partner country;
* DOL and USTR may jointly request consultations, the first step in
dispute settlement. If consultations do not resolve the issues raised
in DOL's report, the agencies may request a meeting of the FTA's free
trade commission.[A]
Source: GAO analysis of 71 Fed. Reg. 76691. GAO-15-160.
Legend: FTA = free trade agreement, USTR = Office of the U.S. Trade
Representative.
[A] DOL may extend the timeframe if it determines that circumstances
require such an extension.
[B] The free trade commission established for each FTA is the primary
forum for bilateral dialogue about the FTA's implementation.
[End of figure]
DOL Has Closed One of Five Labor Submissions Accepted since 2008:
Since 2008, DOL has accepted labor submissions filed under the
Bahrain, Dominican Republic, Guatemala, Honduras, and Peru FTAs and
has closed the Peru FTA submission.[Footnote 43] The submissions for
Bahrain, the Dominican Republic, and Guatemala--accepted in 2011,
2012, and 2008, respectively--remain open while the U.S. government
engages with the governments to address the concerns that the
submissions raised. The submission for Honduras, accepted in 2012,
remains open while DOL reviews its allegations. Figure 3 presents
information about the five submissions (see appendix III for further
details).
Figure 3: Free Trade Agreement (FTA) Labor Submissions Accepted by DOL
as of July 2014:
[Refer to PDF for image: illustrated table]
FTA: Bahrain;
Year accepted: 2011;
Alleged violations: Violation of right to freedom of association,
discrimination;
Status: Open;
Notes: U.S. government held second-round consultations with Bahraini
government on June 22-23, 2014.
FTA: Dominican Republic;
Year accepted: 2012;
Alleged violations: Human trafficking, forced labor, retaliatory
firing of workers for union activities;
Status: Open;
Notes: U.S. government is engaging with Dominican Republic government.
FTA: Guatemala;
Year accepted: 2008;
Alleged violations: Violation of right to freedom of association,
violation of rights to organize and bargain collectively, unacceptable
work conditions;
Status: Open;
Notes: U.S. and Guatemalan governments signed an Enforcement Plan in
April 2013, addressing concerns raised in the submission. U.S.
government granted Guatemalan government a 4-month extension in April
2014 to continue implementing the plan and granted a further 4-week
extension in August 2014. U.S. government determined in September 2014
to proceed with dispute settlement, because Guatemala had not met the
Enforcement Plan's terms.
FTA: Honduras;
Year accepted: 2012;
Alleged violations: Violation of right to freedom of association,
violations of rights to organize and bargain collectively, child labor;
Status: Open;
Notes: U.S. government engagement is pending DOL's submission reviews.
FTA: Peru;
Year accepted: 2011;
Alleged violations: Failure to comply with labor laws related to
collective bargaining;
Status: Closed as resolved (2012).
Source: GAO analysis of Department of Labor (DOL) information.
GAO-15-160.
Notes: DOL has also accepted other labor submissions under the North
American Agreement on Labor Cooperation, which we did not examine.
Alleged violations shown for the Bahrain, Dominican Republic,
Guatemala, and Honduras submissions are examples of those detailed in
the submissions.
[End of figure]
DOL Did Not Meet 6-Month Time Frame for Any Submission, Showing the
Time Frame to Be Unrealistic:
Although DOL accepted most of the submissions it received within the
60-day time frame established by its guidelines, it did not complete
its reviews of the submission within the established 180-day time
frame.[Footnote 44] A DOL official we met with indicated that DOL
cannot complete within the 180-day time frame the types of
comprehensive investigations and reports it has been providing.
For each of the submissions, DOL determined at the end of the original
180-day review time frame to extend the review period and reported its
findings and recommendations an average of 262 days after the original
time frame had ended. According to USTR and DOL, before DOL publishes
its review of a submission, both agencies engage informally with the
relevant partner country to explore ways to address the concerns
raised in the submission. However, USTR and DOL do not request formal
consultations with a partner country to address DOL's recommendations
until DOL has issued its report. As a result, extensions of DOL's
review time frame may delay resolution of the submission.
* Bahrain. DOL received the Bahrain submission on April 21, 2011, and
accepted it on June 10, 2011, or 50 days later. In December 2011, DOL
extended the submission review period to consider and review
additional information received from the government of Bahrain and
Bahraini workers, amendments made to the Bahraini Trade Union Law, and
labor-related developments in international forums. DOL issued its
report on December 20, 2012, 559 days after accepting the submission.
* Dominican Republic. DOL received the Dominican Republic submission
on December 22, 2011, and accepted it on February 22, 2012, or 62 days
later. In August 2012, DOL extended the review time frame to consider
public comments about the submission as well as information gathered
by a Bureau of International Labor Affairs delegation during a visit
to the Dominican Republic. DOL issued its report on September 27,
2013, 583 days after accepting the submission.
* Guatemala. DOL received the Guatemala submission on April 23, 2008,
and accepted it on June 12, 2008, or 50 days later. DOL issued its
report on January 16, 2009, 218 days after accepting the Guatemala
submission.
* Honduras. DOL received the submission on March 26, 2012, and
accepted it on May 14, 2012, or 49 days later. On November 2, 2012, 5
days before DOL's 180-day reporting deadline, DOL extended its review
because of the scope of the submission, the scope of the alleged labor
law violations, and the large amounts of information received from the
Honduran government and stakeholders. As of September 2014, DOL
officials were continuing to review documentation of the allegations
and prepare their report. DOL officials were unable to estimate when
they would issue a public report.
* Peru. DOL received the submission for Peru on December 29, 2010, and
accepted it on July 19, 2011, or 202 days later. On January 20, 2012,
185 days after accepting the submission, DOL concluded that
circumstances required an extension of time for a thorough and
detailed review of the Peru submission. DOL issued its report for the
Peru submission on August 30, 2012, 408 days after accepting it.
Although DOL has periodically reviewed and updated the submission
process since establishing it in 1994, DOL officials told us that they
have not reviewed or adjusted the submission review time frame to
reflect the time it takes DOL to issue its reports after accepting the
submissions. DOL's extensions of each submission review period since
2008 have shown this time frame to be unrealistic. Federal standards
for internal control call on agency management to monitor and assess
the effectiveness and efficiency of their operations over time and to
promptly resolve any deficiencies.[Footnote 45]
Interviewed Stakeholders Generally Did Not Understand the Labor
Submission Process, and U.S. Agencies Have Made Minimal Efforts to
Explain It:
Our interviews with union and other nongovernmental stakeholders in
the selected partner countries suggested that little or no awareness
and understanding of the FTA labor submission process may have
affected the number of submissions filed. Union representatives we
interviewed in our five case study countries--Colombia, El Salvador,
Guatemala, Oman, and Peru--were generally either unaware of DOL's
labor submission process or considered it difficult to understand and
use. For example, a union representative in Colombia stated that the
union would have filed a submission if the representative had known
about the process. In another example, representatives of one of the
larger El Salvador unions--GMIES, an NGO that monitors the actions of
the Salvadorian government--stated that it was difficult for a
"typical worker" to file a submission with DOL and that the
information required for the submission is generally difficult, if not
impossible, to obtain and document. A small number of union
representatives who were aware of the process attributed their
knowledge to information received from AFL-CIO or their country's
Solidarity Center.[Footnote 46] For instance, in Guatemala, a
representative of a union that had signed the current Guatemala
submission stated that without the help of the Solidarity Center, the
union would have been unable to locate submission instructions and
file the submission.
Moreover, although the government officials we interviewed in the five
countries knew of the labor submission process, only in El Salvador
did these officials express an understanding of how DOL evaluates a
submission and conducts its fact-finding investigations. For example,
the Guatemalan Ministry of Labor officials we interviewed could not
provide information about how the process works or describe the
criteria DOL uses to evaluate a submission's merits. The Ministry of
Manpower officials whom we interviewed in Oman did not understand the
purpose of the submission process or how submissions could be filed.
In addition, U.S. agencies have made minimal efforts to publicize the
process for nongovernment stakeholders, who are most likely to file
submissions. Federal standards for internal control pertaining to
information and communication call for agencies to have relevant,
reliable, and timely communications relating to internal as well as
external events, to ensure control of their operations.[Footnote 47]
According to DOL officials, DOL relies exclusively on its website and
its 2006 Federal Register notice to inform the public about the
process.[Footnote 48] Moreover, U.S. officials whom we interviewed in
the countries we visited indicated that they do not advertise the
existence of the submission process. Without additional efforts to
inform nongovernment stakeholders in FTA partner countries about the
DOL labor submission process, U.S. agencies are limited in their
ability to use the submission process as a means of holding FTA
partners accountable for fulfilling their labor commitments.
Some Stakeholders Expressed Concern about Delays in Resolving Labor
Submissions:
Several stakeholders we spoke with expressed concerns about delays in
U.S. agencies' efforts to resolve the matters raised in the Guatemala
and Honduras submissions. Because of the complexity of these matters,
resolving them has proven difficult and time-consuming, according to
USTR. Moreover, according to USTR, no process or time frames for U.S.
agencies' efforts to engage diplomatically with FTA partners to
resolve labor matters related to DOL submission reports are outlined
in any active FTA that had entered into force or in U.S. implementing
guidance.
According to USTR and DOL, they engage with FTA partners through
informal and formal communication to resolve any FTA concerns. For
example, according to a USTR official, USTR has informally engaged
with FTA partners--through labor affairs council discussions,
telephone conversations, and e-mail exchanges--for an average of 6
months regarding concerns raised in a submission before requesting
formal consultations with the partner government.[Footnote 49] If an
FTA partner does not address USTR's and DOL's labor concerns or is
unwilling to informally engage, USTR and DOL may request formal
consultations under the FTA's labor chapter. USTR officials stated
that an FTA partner's willingness to engage determines in part how
quickly potential labor violations are addressed. According to USTR
officials, some FTA partners are willing to engage informally to
resolve labor violations, while other partners engage only after USTR
and DOL have jointly requested formal consultations under the FTA's
labor chapter.
Examples of stakeholders' concerns include the following.
* AFL-CIO representatives in Washington, D.C., who were involved with
the Honduras and Guatemala submissions expressed appreciation of DOL's
care in investigating cases and were eager to provide requisite
evidence. However, they expressed disappointment that both cases have
taken longer than they anticipated, stating that justice delayed can
mean justice denied when workers' livelihoods are at stake.
* A union representative in Guatemala expressed disappointment that 6
years after the submission was filed, it had not been resolved. He
also said that the steps outlined in the enforcement plan were mainly
administrative and did not address all complaints detailed in the
submission. As a result, according to the union representative, the
conditions of workers identified in the submission have not improved.
* Four government officials from CAFTA-DR partner countries whom we
interviewed in Washington, D.C., described DOL's submission process as
lacking fairness and transparency. According to these representatives,
DOL does not give partner governments clear information about next
steps or access to evidence supporting the submissions and deprives
the countries of the opportunity to respond to allegations presented
by any member of the public.[Footnote 50] The CAFTA-DR representatives
added that in their opinion, DOL conducts the submission process in an
adversarial manner and that the process therefore does not function as
a mechanism for addressing concerns on a cooperative basis. The
representatives noted that this, in turn, can delay or complicate
resolution of problems.
U.S. Agencies Provide Limited Monitoring, Enforcement, and Reporting
on FTA Labor Provisions:
Since 2009, USTR and DOL, with State's assistance, have taken steps
intended to strengthen monitoring and enforcement of FTA partners'
compliance with FTA labor provisions, but their monitoring and
enforcement remain limited.[Footnote 51] After USTR announced in July
2009 that the agencies would take a more proactive, interagency
approach to monitoring and enforcing FTA labor provisions, USTR and
DOL developed mechanisms to track labor conditions and practices in
priority trade partner countries. They also took some proactive
monitoring steps with several FTA partners. However, although they
jointly address labor submissions and work together to engage with
partner countries regarding labor concerns, USTR and DOL have not
established a coordinated strategic approach to systematically assess
and address other possible inconsistencies with the FTA labor
provisions, such as concerns that DOL identifies in internal
management reports. The lack of such an approach may be inconsistent
with USTR's 2009 announcement as well as with best practices for
interagency collaboration. Agency officials cited limited funding and
staffing as constraints on their ability to monitor and enforce FTA
labor provisions. USTR's, DOL's, and State's annual reports to
Congress provide information about labor conditions in partner
countries. However, reflecting in part USTR's and DOL's limited
monitoring and enforcement of FTA labor provisions, the reports
generally do not detail concerns about the implementation of FTA labor
provisions by partner countries that have not been the subject of
labor submissions.
USTR and DOL Pledged in 2009 to Strengthen Monitoring and Enforcement
of FTA Labor Provisions:
In 2009, USTR made a public statement pledging to address weaknesses
in monitoring and enforcement of FTA labor provisions such as those we
identified in our July 2009 report.[Footnote 52] In its statement,
USTR--which has principal responsibility for monitoring and enforcing
statutory trade agreements--publicly announced its intention to adopt
a proactive, interagency approach to monitoring and enforcing FTA
labor provisions in cooperation with DOL and State.[Footnote 53]
According to USTR's announcement, for example, the agencies would no
longer enforce labor obligations only in response to complaints, would
hold trading partners to their obligations on labor standards, and
would work in close partnership to immediately identify and
investigate labor violations. In addition, USTR's July 2009
announcement stated that the agencies would deploy resources more
effectively to identify and solve problems at the source and would
jointly engage with governments of countries that violate the rules,
to quickly restore workers' rights, assist partner countries to find a
way to fix identified labor problems, and pursue legal remedies when
other options are closed.
A broad range of activities underpins federal monitoring and
enforcement efforts. For the purposes of this report, "monitoring"
refers to federal activities that are undertaken to identify instances
where foreign laws, regulations, and practices may be inconsistent
with trade agreement provisions; "enforcement" refers to actions taken
by USTR to secure foreign compliance with trade agreements, which can
include initiating dispute settlement procedures that certain trade
agreements provide.[Footnote 54] When agencies identify possible
inconsistencies with FTA provisions, agencies take a variety of
actions to encourage and obtain foreign compliance with trade
agreements. As we previously reported, according to records and staff
at USTR and other agencies, monitoring and enforcement of trade
agreements typically involves several key steps: identifying
compliance problems, setting priorities, gathering and analyzing
information, developing and implementing responses, taking actions to
enforce agreements, and coordinating with other agencies.[Footnote 55]
Systematic implementation of these key steps is necessary to ensure
that the agencies effectively and efficiently accomplish their
objective and help ensure that management's directives are carried out.
In our July 2009 report, we found that U.S. agencies had not
proactively monitored FTA partners' compliance with labor commitments
and did not consider that they were required to do so.[Footnote 56]
Moreover, U.S. interaction with partners regarding labor issues after
FTAs entered into force had been limited, usually in part because of
the low priority attached to this function. Further, we found that
U.S. agencies generally gave attention to problematic labor situations
in certain FTA partners' export sectors only after media exposure of
the situations.
USTR and DOL Track Partner Countries' Labor Conditions but Do Not
Systematically Monitor and Enforce Compliance with FTA Labor
Provisions:
Since July 2009, USTR and DOL have taken steps intended to strengthen
monitoring and enforcement of FTA partners' compliance with FTA labor
provisions.[Footnote 57] USTR staff indicated that an important
component of USTR's and DOL's work occurs between an FTA's
finalization and its entry into force. For example, for the Colombia
FTA, the agencies worked with the Colombian government to establish
the Labor Action Plan, outlining steps that the government was
required to take before the FTA could receive congressional approval.
(See appendix III for information about the agencies' efforts to
monitor Colombia's implementation of the Labor Action Plan).[Footnote
58] In addition, DOL and other U.S. agencies have supported
cooperative activities to assist the countries to be better positioned
to meet their labor commitments after FTAs have entered into force.
[Footnote 59] In general, after FTAs have entered into force, USTR and
DOL have engaged in discussions with partner countries, gathering
information about labor conditions in the countries and responding to
FTA labor concerns. In doing so, the agencies have addressed some of
the typical key elements of monitoring and enforcement that we
previously identified, such as gathering and analyzing information and
setting priorities. However, the agencies' approach for countries
other than Jordan, Panama, and, to some extent, Colombia and Peru
generally does not incorporate other key elements, such as identifying
compliance problems, developing and implementing responses, and taking
enforcement actions.
USTR:
In October 2012, USTR established the Trade Policy Staff Committee
(TPSC) Subcommittee on Labor Monitoring and Enforcement to focus on
monitoring and enforcing labor provisions in partner countries, with
members from various agencies, including DOL and State.[Footnote 60]
USTR charged the subcommittee with monitoring and enforcing labor
issues in 20 FTA partner countries as well as 146 countries that
participate in U.S. trade preference programs. According to a USTR
document, the subcommittee participates in efforts to enforce labor
obligations, such as through submission reviews, consultation, and
dispute settlement under FTAs.[Footnote 61] However, according to DOL
and State staff who have participated in the Subcommittee on Labor
Monitoring and Enforcement, the subcommittee's meetings generally
serve as an information-sharing mechanism rather than a monitoring and
enforcement mechanism.[Footnote 62] State participants described the
subcommittee as an interagency process for reviewing and discussing
labor conditions and assessing risks in trade partner countries,
including FTA and trade preference program partners. State added that
although this process does not entail a regular, detailed review of
each FTA partner country's compliance with labor obligations, it
facilitates discussion of concerns and development of next steps to
address these concerns based on input from each agency. A USTR
official stated that when the subcommittee met in October 2012 and
February 2013, it decided that an emphasis on overseeing labor
conditions in parts of Africa and Haiti was needed and that monitoring
of FTA labor provisions' implementation would be based mainly on
addressing DOL labor submissions. USTR officials noted that
information sharing is a key part of its process to assess labor
conditions in FTA partner countries relative to their commitments and
to identify matters that are appropriate for further action.
According to a USTR official, work by the subcommittee and ad hoc
interagency country teams has led to increased actions and engagement
in countries such as Jordan, Panama, Peru, and Morocco, where,
according to USTR, it has conducted, or expects to conduct, high-level
labor meetings and monitoring trips in 2014. Further, according to
USTR officials, USTR has used input from the subcommittee to develop a
matrix to more comprehensively track monitoring activities and
technical capacity-building assistance across FTA partner countries.
USTR officials indicated that this tool has served as a point of
departure for soliciting the subcommittee's input on priorities and
coordination of future activities. In addition, according to USTR
officials, USTR regularly coordinates and communicates with other
agencies, industry, labor unions, the ILO and other external
stakeholders to identify possible inconsistencies with the labor
provisions of trade agreements.
USTR officials said that the agencies routinely address labor issues
identified in the subcommittee or by other stakeholders through
bilateral consultations and formally established FTA mechanisms, such
as the labor affairs councils established by most FTAs and the FTA
free trade commissions, which are the main forums for bilateral
dialogue about FTA implementation for each FTA. USTR has publicly
reported on such meetings, as we recommended in 2009. However, the
labor affairs councils for most FTAs have in most cases met only once
and in two cases have not met at all since the FTAs entered into
force.[Footnote 63] Moreover, the FTA free trade commissions'
discussions reportedly do not address labor issues in depth. For
example, officials from the Ministry of Labor in Peru indicated that
in the last free trade commission meeting they attended, labor issues
were not substantively addressed; instead members of the commission
agreed that a meeting on the topic could be held later in the year.
USTR officials stated that monitoring and enforcement covers a large
spectrum of activities and that in some cases USTR has taken steps to
resolve issues in countries where submissions have not been filed. For
example, according to USTR officials, USTR and DOL negotiated an
implementation plan in 2012 to address concerns regarding foreign
workers in Jordan's garment sector and have continued to monitor
Jordan's implementation of its FTA labor commitments. USTR officials
also cited as examples of proactive monitoring and enforcement USTR's
engagement with Colombia regarding the Action Plan, cooperation with
Panama in passing administrative and legal changes to address labor
concerns as part of the FTA ratification process in 2011, and
discussions with Peru regarding commitments that the government made
in 2007 to improve respect of labor rights for temporary and
subcontracted workers.
Our analysis shows that in Jordan and Panama, USTR's and DOL's
activities have addressed the typical key elements of monitoring and
enforcement. Regarding Jordan, USTR documents indicate that USTR and
DOL have addressed all key elements of monitoring and enforcement,
such as by putting in place a concrete plan to fix an identified
problem and taking steps to assure that the plan is implemented.
Regarding Panama, USTR documents show that the agencies took steps to
assure that Panama met its commitments both before and after the FTA
entered into effect in 2012 and have been pursuing steps, such as
holding several recent meetings, that may help in resolving
outstanding concerns about implementation of FTA labor provisions.
However, while USTR's and DOL's reported monitoring activities in
Colombia and Peru can assist the countries to be better positioned to
meet their FTA labor commitments and help to better inform USTR of
labor concerns in these countries, the evidence that we examined does
not demonstrate systematic implementation of the typical key elements
for monitoring and enforcement of labor provisions.
* Colombia. Documentation that USTR and DOL provided, as well as
evidence that we gathered in Colombia and in interviews with agency
officials, indicates that the agencies took several of the key steps
of monitoring and enforcement. For example, a report that USTR and DOL
jointly prepared in 2014 showed that the agencies have been gathering
and analyzing information, setting priorities, assessing
implementation, and identifying compliance problems. However, we did
not see evidence that a current plan is in place to address the
outstanding concerns that USTR and DOL have identified.
* Peru. Documentation that USTR and DOL provided demonstrates a
systematic approach to some, but not all, of the monitoring and
enforcement steps that we identified. Specifically, both agencies have
engaged to some extent with Peru regarding labor matters in the 5
years since the Peru FTA went into effect. The agencies' documentation
shows that at least some of their efforts to gather and analyze
information regarding Peru relate to verifying the government's
implementation and enforcement of previous reforms, such as reforms of
its labor inspection regime and of its legal framework for temporary
employment and subcontracting. USTR and DOL documents also show that
the agencies have identified several possible compliance concerns and
have engaged with the government by scheduling meetings and asking
questions. However, we did not see evidence of a plan to resolve
outstanding U.S. concerns. Further, in July 2014, Peru announced that
it had enacted legal changes that rolled back previously implemented
improvements in its labor laws in areas such as health and safety
protection for workers, to improve the business climate and attract
investment.
DOL:
To strengthen its monitoring and enforcement of FTA labor provisions,
in 2012, DOL established the Monitoring and Enforcement of Trade
Agreements Division within the Bureau of International Labor Affairs'
Office of Trade and Labor Affairs.[Footnote 64] The division's
objectives are to ensure that partner governments (1) effectively
enforce their labor laws and implement policies that protect worker
rights; (2) understand their commitments under the FTA labor chapters;
and (3) revise or adopt laws, regulations, and policies consistent
with international labor standards. The division mainly monitors
implementation of FTA labor provisions through its review of FTA labor
submissions and through the use of internal documents called
management reports, according to DOL officials.[Footnote 65] However,
DOL uses management reports to identify labor concerns rather than to
fully assess consistency with FTA labor provisions.
* FTA labor submissions. DOL's review of the five FTA labor
submissions--for Bahrain, the Dominican Republic, Guatemala, Honduras,
and Peru--that it has accepted since 2008 have led to recommendations
in three of its submission reports that the partners address alleged
violations of FTA labor provisions.[Footnote 66] According to USTR
officials, labor submissions are a central component of the FTAs'
framework for monitoring and enforcement of labor obligations and USTR
and DOL invest extensive time and resources in addressing submissions.
For the Bahrain and Guatemala submissions, DOL, with USTR, formally
requested labor consultations under the FTAs' labor chapters to
address the concerns raised in the submissions. In Guatemala's case,
after consultations failed to address the concerns, the U.S.
government invoked dispute settlement proceedings; during these
proceedings, the two governments negotiated the Enforcement Plan,
outlining steps that Guatemala agreed to take. (See appendix III for a
discussion of DOL's monitoring of Guatemala's implementation of the
Enforcement Plan.)
* Internal management reports. In 2012, according to DOL staff, DOL
began consistently monitoring FTA-related labor issues in 13 FTA
partner countries. The management reports provide, among other
information, a synopsis of labor conditions in partner countries based
on sources such as State, ILO, the International Trade Union
Confederation, local stakeholders, and the press. The reports include
updated contact information for each partner and identify labor
conditions or practices--for example, related to freedom of
association and collective bargaining--that may be inconsistent with
the FTA labor provisions. They also outline steps that DOL staff
propose to take to address any identified concerns, subject to
approval and resource availability. According to DOL officials, DOL
uses the management reports to identify labor concerns, rather than
potential FTA violations for enforcement purposes, and to facilitate
engagement on technical assistance projects with FTA partner
countries. DOL officials noted that claiming and proving a violation
of FTA labor provisions would be very costly and legally complicated.
The officials explained that when a management report identifies labor
concerns, DOL may request formal or informal consultations with the
partner country's ministry of labor to discuss these concerns and will
attempt to cooperatively address them. The officials also noted that a
persistent condition may result in a submission from a stakeholder.
USTR and DOL Lack a Coordinated Strategic Approach to Address
Identified Labor Issues:
USTR and DOL work together on an ad hoc basis to address labor
concerns identified in submissions and to engage with partner
countries regarding labor matters. However, the agencies have not
developed a coordinated strategic approach to systematically assess
and address other possible inconsistencies with FTA labor provisions,
such as the issues that DOL's management reports identify, in other
partner countries. This lack of a joint approach may be inconsistent
with USTR's 2009 statement that the agencies would work in close
partnership to immediately identify and investigate labor violations.
Further, while the agencies take steps such as gathering facts from
credible and reliable sources and prioritizing their monitoring of the
partner countries, they have not jointly operationalized other key
steps that we previously identified as typical for monitoring and
enforcement of trade agreements. For example, although DOL's
management reports are its primary means, other than submissions, of
monitoring and identifying issues that may be inconsistent with FTA
labor provisions, the agencies have not established a coordinated
strategic approach to identify and carry out steps necessary to
address issues identified in the reports. According to DOL, the
management reports are available to USTR and State and the three
agencies routinely discuss the reports' contents. USTR confirmed that
DOL shares information from the reports with the Subcommittee on Labor
Monitoring and Enforcement for discussion and consideration. However,
USTR officials noted that USTR regards the management reports as one
of multiple information sources that it considers before deciding to
engage with a country about a labor concern, rather than as an
indicator of a need to engage with the country. USTR officials also
noted that USTR views the management reports as a new internal DOL
tool and is assessing how best to use these reports in the interagency
process.
Moreover, USTR, DOL, and State have differing perspectives on how to
monitor and enforce FTA labor provisions, according to agency
officials. According to a USTR official, each agency approaches
monitoring and enforcement in relation to its mission, and as a
result, some of the 13 countries that DOL has identified internally as
priorities differ from countries that USTR has identified as
priorities in the context of the FTAs. The USTR official stated that
USTR must assess whether a labor issue constitutes a breach of
obligations set forth in the relevant FTA before it pursues dispute
settlement, whereas DOL and State--as observers of labor conditions
and human rights, respectively--approach labor issues more strictly as
labor rights concerns. According to a State official, USTR prefers to
address identified partner countries' labor issues without the intent
to invoke the FTA.
Our prior work identifying best practices for interagency
collaboration has shown that agencies can enhance and sustain their
collaborative efforts by engaging in eight practices.[Footnote 67] For
example, to achieve a common outcome, collaborating agencies need to,
among other things, not only define and articulate the outcome but
also establish strategies that work in concert with their partners' or
are joint in nature. Such strategies help in aligning the partner
agencies' activities, core processes, and resources to accomplish the
common outcome.
U.S. Agencies Focus Limited Monitoring and Enforcement Resources on a
Few Priority Countries:
Agency officials cited limited staffing and resources as constraints
on their ability to proactively monitor and enforce implementation of
FTA labor provisions as the number of FTAs increases, leading the
agencies to focus most of their efforts in a few priority countries.
The agencies described enforcement activities as particularly resource
intensive. DOL officials told us that because they had to focus much
of their available resources on enforcing the Colombia Labor Action
Plan and the Guatemala Enforcement Plan, their ability to monitor and
enforce FTA partners' compliance with their FTAs' labor provisions in
the last year was limited. Given the staffing and resource constraints
that USTR, DOL, and State officials cited, effective interagency
collaboration--including joint strategies that assist in aligning
partner agencies' activities, core processes, and resources to more
effectively accomplish the common outcome--is essential to maximize
the agencies' ability to monitor and enforce compliance with these
provisions.[Footnote 68]
USTR. Staffing and funding constraints have, at times, limited the
office's engagement with FTA partner countries regarding labor
matters, according to USTR officials. Notably, according to the
officials, recent sequestration-related cuts at USTR sharply limited
travel. The officials told us that USTR's Office of Labor Affairs has
four staff members--an Assistant U.S. Trade Representative for Labor,
two Deputy Assistant U.S. Trade Representatives for Labor, and the
Director for Labor Affairs--whose responsibilities include, among
others, negotiating labor provisions in new agreements such as the
Trans-Pacific Partnership, overseeing labor matters for 20 FTA partner
countries and 120 trade preference countries, and engaging with
countries to address labor complaints. According to USTR officials,
although the Office of Labor Affairs staff has doubled from two to
four since 2008, the number of trade partner countries for which they
are responsible has increased from 14 to 20. USTR staff stated that
because so few staff are available, they cannot engage with partner
countries regarding every labor issue identified and must address such
issues in cooperation with other agencies. USTR staff also noted that
they depend on DOL and State for day-to-day monitoring of labor
conditions in partner countries.
DOL. Resource constraints limit DOL's ability to monitor
implementation of FTA labor provisions except in partner countries
that DOL has identified as priorities, such as countries cited in
labor submissions, according to DOL officials. DOL reported that in
fiscal years 2013 and 2014, the Monitoring and Enforcement of Trade
Agreements Division had five to eight full-time staff, with primary
responsibilities that include monitoring labor conditions in 20 FTA
partners and addressing and following up on labor submissions--for
example, assessing implementation of submission report recommendations
and engaging in consultations with the FTA partner. DOL officials
stated that over the past year, the division's staff spent 80 percent
of their work hours monitoring implementation of the Guatemala
Enforcement Plan; following up on activities initiated under the
Colombia Labor Action Plan; and addressing labor submissions for
Honduras, the Dominican Republic, Bahrain, and Mexico.[Footnote 69]
The employees' remaining work hours were available to monitor and
engage with the other 14 FTA partner countries. DOL officials
expressed concern that challenges related to resource limitations will
grow as the number of FTAs increases. For example, according to DOL
and State officials, Vietnam is among the countries participating in
the Trans-Pacific Partnership negotiations with a poor record of
protecting labor rights.
State. State has limited resources available to support USTR's and
DOL's monitoring of FTA labor provisions, according to State
officials. State's Bureau of Democracy, Human Rights, and Labor (DRL)
coordinates State's in-country labor officers or labor reporting
officers, who carry out regular monitoring and reporting and day-to-
day interaction with foreign governments on labor matters. However,
these staff are not responsible for monitoring implementation of labor
provisions in the FTAs. State informs USTR and DOL about labor
concerns identified in FTA partner countries, through reporting cables
and other means, and supports them in investigating labor submissions
and addressing related recommendations. DRL has seven staff at State's
headquarters in Washington, D.C., one of whom focuses on trade-related
issues, who are supported by labor affairs officers and labor
reporting officers at the embassies in each of the 20 FTA partner
countries.[Footnote 70] State officials explained that each of these
labor affairs officers and labor reporting officers has other
responsibilities. Overall, the amount of time that these officers
dedicated to labor issues varied from 5 percent (in Australia) to 75
percent (in Mexico).
U.S. Agencies' Annual Reports Address FTA Partners' Labor Conditions
to an Extent:
USTR, DOL, and State provide required annual reports to Congress that
contain some information about labor conditions in FTA partner
countries. However, the annual reports generally do not detail
concerns about the implementation of FTA labor provisions by partner
countries that have not been the subject of labor submissions, in part
reflecting the agencies' limited monitoring and enforcement of the
provisions.[Footnote 71] USTR has statutory responsibility to report
to Congress about trade agreement programs on an annual basis.
According to DOL and State, they do not have such a responsibility,
although some of their required reports include related information.
USTR. Each year, USTR provides Congress with the current Trade Policy
Agenda for the current year, as well as the Annual Report of the
President of the United States on the Trade Agreement Programs. The
agenda and the annual report include information about trade policy
priorities and actions taken to implement FTAs. For example, the 2014
agenda indicates, among other things, that USTR will seek to ensure
that trade partners meet their obligations related to labor rights,
will focus on implementation of FTAs, and will work with key partner
countries to address specific labor issues. The 2013 annual report
describes, among other things, the status of the labor submissions
regarding Bahrain, Guatemala, the Dominican Republic, and Honduras and
USTR's efforts to address the concerns that the submissions identify;
in some cases, possible inconsistencies with the FTA may be discussed.
However, the annual report generally does not detail concerns about
the implementation of FTA labor provisions by partner countries that
have not been the subject of labor submissions, reflecting in part
USTR's and DOL's limited monitoring and enforcement of these
provisions. Including appropriate information resulting from more
extensive monitoring and enforcement could help inform Congress and
other U.S. stakeholders about the extent to which trade partners are
fulfilling their FTA labor commitments.
DOL. DOL is required to report to Congress every 2 years regarding
labor issues related to CAFTA-DR but is not required to report on the
implementation of labor provisions in other FTAs. For CAFTA-DR, DOL is
required to submit a biennial report to Congress on the progress made
by the CAFTA-DR partner countries in implementing the labor chapter
provisions and labor cooperation and capacity-building activities.
[Footnote 72] DOL's 2011 report on CAFTA-DR summarizes the progress
made by each CAFTA-DR partner country in implementing these provisions
and activities, although the report generally does not detail concerns
about the implementation of CAFTA-DR labor provisions.
State. Every year, State provides Congress with the annual Country
Reports on Human Rights Practices, which covers all countries
receiving assistance and all United Nations member states, including
all U.S. FTA partners. Each of the country reports includes a section
on labor issues, covering topics such as internationally recognized
individual, civil, political, and worker rights, as set forth in the
Universal Declaration of Human Rights and other international
agreements. In addition, most of the country reports for FTA partner
countries that we reviewed include information about unfavorable
conditions faced by workers and any challenges to the partner
countries' implementation of their labor laws. The reports generally
do not--and, according to State, are not intended to--detail concerns
about the implementation of FTA labor provisions.
Conclusions:
The United States' recent FTAs have served as means of securing
commitments from trade partners to uphold and protect internationally
recognized labor rights. Although the FTA partners we selected for our
review have made some progress, with U.S. assistance, in implementing
their FTA labor commitments, enforcement weaknesses and problematic
labor conditions persist. In addition, nongovernment stakeholders we
interviewed in partner countries had little or no awareness of the
labor submission process that DOL established to allow such
stakeholders to register concerns about FTA partners' labor practices.
Further, DOL's extensions of its 6-month submission review time frame
by an average of nine months per submission has shown the time frame
to be unrealistic. Moreover, U.S. agencies' work with the partners to
resolve these concerns has in some cases been very time consuming. For
example, 6 years after DOL received the Guatemala labor submission,
the submission remains open, and according to U.S. agencies, Guatemala
has not fully addressed the weaknesses in its labor law enforcement or
the resulting hardships on workers.
Further, although USTR and DOL jointly pledged in 2009 to adopt a more
assertive, interagency approach to monitoring and enforcing FTA labor
provisions, in practice the agencies systematically investigate
possible inconsistencies with these provisions primarily in response
to labor submissions. In addition, despite ongoing interaction between
USTR and DOL--for example, in addressing submissions--they have not
developed a strategic approach to jointly set priorities and
coordinate efforts to respond to labor concerns such as those
identified in the DOL management reports. Without such strategic
coordination, and given constraints on resources, both agencies have
focused their monitoring and enforcement activities, apart from
addressing labor submissions, on a few priority countries. As a
result, consistency with FTA labor provisions in most partner
countries is generally not monitored and enforced systematically.
Moreover, USTR may be limited in its ability to report to Congress
regarding concerns about FTA partners' implementation of their
respective FTA labor commitments.
Recommendations for Executive Action:
To improve the capacity of the U.S. government to monitor and enforce
FTA partners' compliance with mutually agreed FTA labor provisions, we
are making four recommendations to the U.S. Trade Representative and
the Secretary of Labor.
* We recommend that DOL reevaluate and adjust, if necessary, its FTA
labor submission review time frame to ensure that it more accurately
reflects the time required to thoroughly investigate and to report on
most labor submissions.
* We recommend that DOL take steps to better inform stakeholders in
FTA partner countries about its FTA labor submission process.
* We recommend that USTR and DOL, in cooperation with State, establish
a coordinated strategic approach to monitoring and enforcing FTA labor
provisions, to ensure that they systematically assess the consistency
of priority FTA partner countries' laws, regulations, and practices
with trade agreement labor provisions and address any identified
concerns.
* We recommend that USTR ensure that the Annual Report of the
President of the United States on the Trade Agreement Programs, which
USTR provides each year to Congress, includes results of USTR's and
DOL's efforts to proactively monitor partner countries' compliance
with FTA labor provisions.
Agency Comments and Our Evaluation:
We provided a draft of our report to USTR, DOL, State, and USAID. USTR
and DOL provided written comments, which are reproduced in appendixes
V and VI, respectively. USTR, DOL, and State also provided extensive
technical comments, which we incorporated or addressed as appropriate.
USAID did not provide comments.
In their written comments, USTR and DOL expressed general agreement
with our recommendations. USTR wrote that it embraced the
recommendation to improve coordination with the Departments of Labor
and State, to identify and address areas of concern, and to ensure
that its reporting to Congress effectively reflects the results of
these efforts. DOL committed to reevaluate its internal submission
review process, in consultation with USTR and State, to determine
whether internal adjustments may be necessary. DOL also said that it
will evaluate additional available actions to expand its ability to
inform stakeholders in FTA partner countries about the FTA labor
submission process. Finally, DOL said that it will evaluate additional
options to increase its proactive monitoring and enforcement of labor
provisions in FTAs and its coordination with USTR and State on such
issues.
Nevertheless, USTR and DOL took issue with our findings that the
agencies do not systematically monitor and enforce labor provisions
for all FTA partners and lack a coordinated strategic approach to
monitoring and enforcement. Although we made some adjustments in
response to new information that USTR and DOL provided with their
comments, we maintain that, in general, the two agencies have not
systematically implemented all key elements of monitoring and
enforcement with regard to FTA labor provisions. (See appendix V for
our full response to USTR's written comments and descriptions of our
adjustments to the report in response.) We acknowledge that USTR, DOL,
and State generally collaborate in engaging with partner countries on
labor issues and in addressing submissions. However, the evidence that
we reviewed, such as agendas for interagency meetings and our
interviews with USTR and DOL staff, did not show that the agencies
have developed a coordinated, strategic approach to systematically
address possible inconsistencies with FTA labor provisions in most
partner countries that have not been the subject of labor submissions.
For example, we did not see evidence of a coordinated approach to
address issues such as those identified by USTR in the partner
countries it designates as high risk or that DOL identifies in its
management reports.
As agreed with your office, unless you publicly announce the content
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the U.S.
Trade Representative, the Secretary of Labor, the Secretary of State,
and other interested parties. In addition, the report is available at
no charge on the GAO website at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-8612 or gianopoulosk@gao.gov. Contact points
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found on the last page of this report. GAO staff who made key
contributions to this report are listed in appendix VII.
Signed by:
Kimberly Gianopoulos:
Acting Director, International Affairs & Trade:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
This report examines (1) steps that selected partner countries have
taken, and U.S. assistance they have received, to implement free trade
agreement (FTA) labor provisions and other labor initiatives and the
reported results of such steps; (2) complaints--known as submissions--
about possible violations of FTA labor provisions that DOL has
accepted and any problems related to the submission process; and (3)
the extent to which the Office of the U.S. Trade Representative
(USTR), Department of Labor (DOL), and Department of State (State)
monitor and enforce partner countries' implementation of FTA labor
provisions and report results to Congress. In addition, appendix II
describes reported violence against labor unionists in selected FTA
partner countries as well as steps that the countries have taken to
address such occurrences. Appendix III describes U.S. agencies'
efforts to monitor implementation of other labor initiatives. Appendix
IV describes the status of labor submissions received by the
Department of Labor.
We chose to concentrate our review on four FTAs and five partners to
these FTAs, so that we could examine the unique set of circumstances
for FTA partner countries with some specificity. The FTAs and partner
countries on which we chose to focus--the Dominican Republic-Central
America-United States (CAFTA-DR), among whose six partner countries we
selected El Salvador and Guatemala; the Colombia FTA; the Oman FTA;
and the Peru FTA--are FTAs that contain labor provisions and countries
with regional dispersion across Central America, South America, and
the Middle East. We also selected CAFTA-DR because of the CAFTA-DR
White Paper labor initiatives, and we selected El Salvador and
Guatemala among CAFTA-DR countries because of the extent of U.S.
assistance for labor programs and, in Guatemala's case, the FTA-
related Enforcement Plan. In addition, we selected the Colombia FTA
because of the Labor Action Plan, and we chose the Colombia and Peru
FTAs because they contain language echoing the Bipartisan Trade
Agreement of May 10, 2007, popularly known as the May 10th Agreement.
However, the results of our review of these selected FTAs and partner
countries cannot be generalized to all FTAs and partner countries.
In gathering information for each of our objectives, we engaged in
three types of activities:
* We obtained information and perspectives from U.S. government,
foreign government, nongovernmental organization (NGO), labor union,
and private sector officials; stakeholders such as umbrella business
associations; and experts.
* We obtained information and analysis from legal and secondary
literature sources.
* We obtained information through visits to partner countries.
During our visits to Colombia, El Salvador, Guatemala, Oman, and Peru,
we met with U.S. officials; foreign government officials responsible
for the implementation of labor provisions of the FTAs and other labor
initiatives; umbrella business groups, such as chambers of commerce;
officials of international organizations such as the International
Labour Organization (ILO), trade unions, NGOs, and other subject
matter experts. Additionally, we visited Costa Rica to meet with ILO
officials in their Central America regional office, in San Jose. The
views expressed by these officials and organizations cannot be
generalized to all officials or organizations knowledgeable about
labor provisions in the selected FTAs.
Objective 1: Examine Steps That Selected Partner Countries Have Taken,
and U.S. Assistance They Have Received, to Implement FTA Labor
Provisions and Other Labor Initiatives and the Reported Results of
Such Steps:
To examine the steps that the selected FTA partner countries have
taken to implement labor protection commitments under the respective
agreements and other labor initiatives in the context of the
respective FTAs, as well as the reported results of these steps, we
obtained, reviewed, and analyzed documents from a variety of sources,
including the four selected FTAs and their associated labor annexes as
well as the CAFTA-DR White Paper and the Colombia Labor Action Plan.
For this analysis, we included steps taken by partner countries,
beginning with FTA negotiations for each FTA through May 2014. We also
reviewed congressionally mandated reports, such as State's Country
Reports on Human Rights Practices (Human Rights Reports), of which the
2013 reports were the latest available; USTR's annual trade agenda and
trade report; and DOL's biennial Progress in Implementing Chapter 16
(Labor) and Capacity Building under the Dominican Republic-Central
America-United States Free Trade Agreement. In addition, we reviewed
reports submitted to Congress in conjunction with FTA implementing
legislation, such as DOL's Labor Rights Reports for each of our
selected FTAs.
Additionally, we interviewed officials from DOL's International Labor
Affairs Bureau and the Office of Trade and Labor Affairs; USTR's Labor
Affairs office; and State's Bureau of Democracy, Human Rights, and
Labor. We also interviewed State desk officers responsible for
selected partner countries and labor, political, and economic officers
at U.S. embassies. In each of the selected countries, except Colombia,
we interviewed officials from the relevant ministries, including the
ministry of labor. (Colombia's Ministry of Labor chose to provide
written responses to our questions.) We did not independently identify
or evaluate FTA partner countries' enforcement or compliance with laws
and procedures but rather relied on evidence obtained from U.S. and
partner government as well as stakeholder sources. Because of the
ILO's role in interpreting, assessing, and improving signatories'
compliance with ILO Conventions and Fundamental Principles, we
conducted a series of meetings at the ILO in Geneva as well as with
umbrella organizations participating in the ILO's tripartite
(government-business-labor) governance structure.
To examine U.S. funding for labor-related assistance projects, we
collected data on such funding obligations--from the date when
Congress passed the respective FTA implementing legislation through
2013--from relevant officials at State, DOL, and USAID and publicly
available data on trade-related labor assistance from USAID's Trade
Capacity Building Database. We assessed the reliability of the data by
(1) interviewing agency officials knowledgeable about the data sources
and (2) tracing the data to source documents. We determined that the
data were sufficiently reliable for the purposes of describing U.S.
assistance for labor provisions in FTA countries.
In addition, to identify any changes in levels of reported violence
against workers exercising labor rights in the selected countries and
the partner governments' responses (see appendix II), we obtained,
reviewed, and analyzed documents from USTR, DOL, and State, such as
State's Human Rights Reports and DOL's Labor Rights Reports. During
our fieldwork in each selected country, we interviewed U.S. and
foreign government officials, labor unions, and NGOs to learn of any
violence against unionists. Of the countries we selected for review,
violence against unionists was reported only in Colombia and
Guatemala. During our fieldwork in Colombia, we interviewed and
obtained information from entities responsible for collecting and
reporting data on violence against unionists, including the Colombian
Prosecutor General's office; ENS (Escuela Nacional Sindical)--a labor
rights NGO--and State's Human Rights and Labor officers at the U.S.
embassy in Bogota. We assessed the reliability of ENS's and the
Colombian Prosecutor General's data by (1) interviewing officials from
each entity about their criteria and data collection methodology for
determining whether a victim's union activity was a motive in the
killing and (2) interviewing State's Human Rights and Labor officers,
who report ENS and Colombia's Prosecutor General's data in the annual
Human Rights Report for Colombia. We determined the data to be
sufficiently reliable for the purposes of describing reported violence
against unionists in Colombia. In Guatemala, we interviewed, and
obtained information from, the Guatemalan Prosecutor General's Office,
which is responsible for prosecuting crimes against unionists, and the
Guatemalan Ministry of the Interior, which investigates crimes against
unionists at the direction of the Prosecutor General's Office. Because
Guatemala did not collect data on violence against unionists, we did
not review such data on homicide rates over time. We also interviewed
State's political officer responsible for labor affairs at its embassy
in Guatemala City, labor unions, and NGO officials. We reviewed ILO
reports and discussed steps by Colombia and Guatemala to address
violence with ILO officials. Our analysis was based on reputable
secondary sources. We did not make any independent determination
regarding the merit of any evidence of violence against unionists.
Objective 2: Examine Submissions about Possible Violations of FTA
Labor Provisions That DOL Has Accepted and Any Problems Related to the
Submission Process:
To examine labor submissions that have been filed under FTA agreements
and any problems related to the submission process, we obtained,
reviewed, and analyzed documents, including each labor submission
filed with DOL. We interviewed officials from DOL's Office of Trade
and Labor Affairs--the office responsible for investigating and
reporting on submissions--as well as USTR and State officials who
review DOL's reports and are involved in following up with FTA partner
countries, if needed. During our fieldwork, we interviewed union and
NGO representatives involved in filing submissions, as well as
relevant government ministries, including the Ministries of Labor in
Peru and Guatemala.
Objective 3: Examine the Extent to Which USTR, DOL, and State Monitor
and Enforce Partner Countries' Implementation of FTA Labor Provisions
and Report Results to Congress:
To examine the extent to which USTR, DOL, and State monitor and
enforce implementation of FTA labor provisions and associated
commitments (see appendix III) and report results to Congress, we
requested, reviewed, and analyzed documents from each agency. These
documents included strategic plans and documents reflecting monitoring
activities, such as DOL's management reports for 13 selected FTA
partner countries, State cables, and USTR monitoring documents. In
addition, we interviewed selected members of the USTR-chaired Trade
Policy Staff Committee and its subcommittee on FTA labor monitoring
and enforcement. To examine the resources that USTR, DOL, and State
dedicate to monitoring labor provisions in FTAs, we obtained and
analyzed data on staffing and other resources such as travel. We
interviewed officials from DOL's International Labor Affairs Bureau
and its Office of Trade and Labor Affairs; USTR; and State's Bureau of
Democracy, Human Rights, and Labor, as well as State's in-country
labor, labor reporting, political, and economic officers at U.S.
embassies during our fieldwork. In addition, during our fieldwork, we
interviewed officials from the partner countries' various ministries,
including the ministries of labor, as well as representatives from
labor unions and NGO officials implementing programs funded by U.S.
agencies. To determine whether USTR, DOL, and State report the results
of their monitoring activities to Congress, we reviewed and analyzed
the agencies' reports, such as USTR's Trade Policy Agenda and Annual
Report (2009 to 2013), DOL Annual Performance Reports (2010 to 2013),
and State's Human Rights Reports (2009 to 2013).
We conducted this performance audit work from May 2013 to November
2014 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Reported Violence against Trade Unionists in Colombia and
Guatemala:
Colombia:
Violence and Threats of Violence against Unionists, Undermining
Freedom of Association, Have Been Reported in Colombia:
U.S. and Colombian officials and representatives of unions,
nongovernmental organizations (NGO), and private sector groups we met
with reported that violence against unionists continues to exist in
Colombia, which union leaders and NGOs reported undermines workers'
ability to freely associate because of the fear that their union
activities may lead them to become victims of violence.[Footnote 73]
NGO officials in Colombia reported that although murders of unionists
are a serious concern, threats of violence against union members also
create a significant deterrent to workers organizing, with one NGO
official noting a greater impact in rural areas than in major cities.
According to this NGO official, authorities are less likely to have
the capacity to investigate and respond to threats made in rural
areas, with the result that victims flee the area or disengage from
labor activities.
Data collected by the NGO Escuela Nacional Sindical (ENS) and the
Colombia Prosecutor General's Office, as reported in the U.S.
Department of State's Human Rights Reports, show that murders of trade
unionists have generally decreased over the past decade, although
homicides continue to occur (see figure 4).[Footnote 74] For example,
according to DOL, as of July 2014 ENS had recorded 35 murders in 2013,
compared with 102 murders of union members and labor activists in
2003. This trend continued in the period since the Labor Action Plan--
which contains specific commitments to address labor violence--was
announced in 2011. Labor union officials acknowledged the number of
homicides has decreased, but they noted that violence continues to
exist.
Figure 4: Murders of Unionists in Colombia, 2003-2013:
[Refer to PDF for image: multiple line graph]
Number of murders:
Year: 2003;
Escuela Nacional Sindical (ENS): 102;
Government of Colombia: 101.
Year: 2004;
Escuela Nacional Sindical (ENS): 94;
Government of Colombia: 89.
Year: 2005;
Escuela Nacional Sindical (ENS): 72;
Government of Colombia: 40.
Year: 2006;
Escuela Nacional Sindical (ENS): 76;
Government of Colombia: 60.
Year: 2007;
Escuela Nacional Sindical (ENS): 39;
Government of Colombia: 26.
Year: 2008;
Escuela Nacional Sindical (ENS): 49;
Government of Colombia: 39.
Year: 2009;
Escuela Nacional Sindical (ENS): 47;
Government of Colombia: 28.
Year: 2010;
Escuela Nacional Sindical (ENS): 51;
Government of Colombia: 34.
Year: 2011;
Escuela Nacional Sindical (ENS): 29;
Government of Colombia: 20.
Year: 2012;
Escuela Nacional Sindical (ENS): 30;
Government of Colombia: 24.
Year: 2013;
Escuela Nacional Sindical (ENS): 26;
Government of Colombia: 24.
Source: GAO analysis of ENS and government of Colombia data, as
reported by Department of State and Congressional Research
Service. GAO-15-160.
[End of figure]
Further, according to ENS, as a result of the Labor Action Plan, ENS
and the Prosecutor General's Office have developed a collaborative
relationship, with the Prosecutor General's Office consulting with ENS
on cases involving murders or threats that may be linked to the
victims' union activities.
Government officials and labor groups we met with in Colombia all
reported that threats of violence against unionists have been
increasing. However, ENS is the only source of such threat data, and
its reports do not show a clear pattern over the past decade.[Footnote
75] ENS's data represent only reported threats; threats of violence
against unionists may go unreported.
Colombia Has Taken Agreed Steps to Prevent and Investigate Violence
against Trade Unionists, but Unions Report That Violence Persists:
The government of Colombia committed to a number of reforms related to
labor violence in April 2011 in the Labor Action Plan. Such
commitments included broadening the scope of the government of
Colombia's protection program, Unidad Nacional de Protección (UNP), to
include labor activists, union members, and people engaging in efforts
to form a union, increasing the budget for the additional resources
necessary to support the expansion of the protection program,
eliminating the backlog of protection applications awaiting risk
assessments, completing future risk assessments within a 30-day period
(as described below), and reforming the Colombian interagency
committee that reviews risk assessments. In addition, Colombia
committed to criminal justice reforms in the Labor Action Plan, which
included:
* assigning 95 additional full-time judicial police investigators to
support the investigations of criminal cases involving union members
and activists;
* analyzing closed cases of union member homicides to determine
patterns relating to targets, criminal methods, and any evidence of
motives;
* identifying budgetary needs for training investigators and
prosecutors on issues related to labor cases; and:
* instructing investigators to determine whether a homicide victim was
an active or retired union member, or was actively engaged in union
formation and organization, during the initial phase of the
investigation.
According to the Office of the U.S. Trade Representative (USTR) and
the Department of Labor (DOL), in accordance with Colombia's Labor
Action Plan commitments, the Colombian government has implemented
changes to a number of institutions and programs. For example, union
members, in addition to union leaders, are now included in the UNP's
jurisdiction. As of April 2014, the UNP protects more than 670
unionists, with about 24 percent of its budget dedicated to the
protection of unionists and labor activists.
Additionally, USTR has reported that the Colombian government reformed
the risk assessment process at the UNP and eliminated the backlog of
hundreds of applicants to the protection program. During our fieldwork
in Colombia, UNP officials described changes to the risk assessment
process. For example, when an application is received, instead of a
single individual investigating the case, as occurred before the
process's reform, a committee now conducts interviews and fieldwork to
investigate the nature of the threat and determine a risk score. The
case is then forwarded to another committee, comprising
representatives from organized labor, other vulnerable populations,
and government agencies, that determines the risk level in each case
as ordinary, extraordinary, or extreme. UNP officials reported that,
based on the outcome of the risk assessment, protection measures
ranging from providing a cell phone to providing an armored car and
armed bodyguards are taken. State's 2013 Human Rights Report notes
that between January 1 and October 31, 2013, the UNP conducted 565
risk assessments of union leaders or members. Of those, the UNP
classified 203, about 36 percent, as having an extraordinary threat or
extreme threat and provided the leaders or members with protection
measures. According to UNP officials, prior to the Labor Action Plan-
related reforms, about 10 to 15 percent of risk applicants were
determined to be under extraordinary or extreme risk. Additionally,
according to State, approximately one-half of the unionists enrolled
in the program were provided with "hard" protection measures that
included a bodyguard.
According to USTR, Colombia increased the budget of its Prosecutor
General's Office, in part to investigate and prosecute cases involving
union members or labor activists as victims. Further, USTR has
reported that the Prosecutor General's Office has issued a mandate
that assigned over 20 prosecutors exclusively to crimes against union
members and labor activists. In addition, the National Police have
assigned an additional 100 full-time judicial police investigators to
support the prosecutors in investigating cases involving union members
and labor activists. To implement the Labor Action Plan commitments to
identify and effectively prosecute intellectual authors of labor
homicides, the Prosecutor General's Office created a context and
analysis directorate tasked with investigating the patterns and
context of similar cases, including labor homicides. Officials from
this unit we met with during our fieldwork in Colombia described the
unit as taking an integrated approach to analyzing cases across the
spectrum of human rights crimes to determine common themes and
perpetrators.
Despite the actions Colombia has taken to reduce violence against
union members and labor activists, Colombian union and NGO officials,
as well as USTR officials, report that violence and impunity remain
problems. Union members we met with during our fieldwork in Colombia
reported the existence of a high impunity rate for violent crimes
against unionists. According to DOL, of the 100 unionist murders that
have occurred since 2011, Colombia's Prosecutor General's Office has
obtained only one conviction. Union officials we met with acknowledged
that the government of Colombia has taken positive steps to address
violence, that the number of labor-related homicides has decreased,
and that reforms have been implemented at the UNP. However, they also
reported they are concerned for their safety because of their union
activities. Additionally, union officials voiced the concern that risk
was not being assessed at the UNP in a way that accurately captured
the dangers union leaders and members face. UNP officials we met
acknowledged that two union leaders who were receiving "light"
protection were murdered and another union leader was murdered while
he awaited the UNP's risk assessment.
U.S. Government Has Provided Assistance to Colombia to Address
Violence, Including Violence against Unionists:
In support of reducing violence in Colombia, including violence
against unionists, U.S. agencies have funded multiple assistance
projects. According to U.S. Agency for International Development
(USAID) officials, from 2001 to 2010, the agency provided about $11.6
million in funding through its Human Rights fund to establish and
support Colombia's UNP. The UNP, which is under the Colombian Ministry
of Interior, received between 10 and 18 percent of its total annual
budget from USAID funding from 2001 to 2005 (ranging from about
$916,000 in 2001 to about $2.5 million in 2005). According to USAID,
its assistance for the UNP has steadily decreased as budget support
from the government of Colombia and the effectiveness of the UNP have
increased. For example, from 2011 to 2014, USAID provided
approximately $150,000 per year in assistance to the UNP.
In support of Colombia's Labor Action Plan commitment to seek
cooperation, advice, and technical assistance of the International
Labour Organization (ILO), DOL is currently funding a 5-year (2011 to
2016), $7.82 million technical cooperation project implemented by the
ILO. The objectives of this project include strengthening the
institutional capacity of the Colombian government to enhance
protection measures for trade union leaders, members, activists, and
organizers and combating impunity for perpetrators of violence against
them. Under this project, the ILO is training Colombian prosecutors,
investigators, and judges on labor rights and investigating crimes
against union leaders and labor activists. In addition, Colombia's
Prosecutor General's Office officials reported that the office has
received assistance from the U.S. Department of Justice on broad
criminal justice reforms, including transitioning from an
inquisitorial to an accusatory legal system. USTR reports that State
has funded, and the Department of Justice has implemented, assistance
to train investigators and prosecutors throughout Colombia in best
practices for crime scene investigation, including forensic evidence
handling, investigating threats, and prosecutorial management of cases
for trial. The Department of Justice's and State's programs are aimed
at broader criminal justice reform; however, Colombia's Prosecutor
General's Office reported to us that the reforms apply to
investigating and prosecuting violence against unionists.
Guatemala:
Instances of Violence and Threats of Violence against Trade Unionists
Have Been Reported in Guatemala:
U.S. and Guatemalan government officials and ILO and union
representatives reported that violence against unionists exists in
Guatemala; however, the extent of the problem is unclear because
disaggregated statistics on violence against unionists are not
collected. Nevertheless, a union collected information on 63 cases in
which union leaders or members were killed from 2007 through 2013. The
unions alleged that the motive for these murders was related to the
victims' union activities and that the government of Guatemala has not
done enough to investigate and resolve the cases. In addition, ILO
officials stated that they have detailed extremely serious and
systematic violations of the right to freedom of association in
Guatemala, including murder.
A 2012 ILO complaint against the Guatemalan government cited 63
murders of trade unionists and called for the establishment of an ILO
commission of inquiry.[Footnote 76] Guatemalan officials confirmed
that violence against trade unionists exists but reported that many of
the cases cited in the ILO complaint were the result of general,
extensive violence and crime in the country rather than violence
directed against trade unionists. According to Ministry of the
Interior officials, the ministry's initial investigation of the 63
murder cases was unable to identify any link between the perpetrators'
motives and the victims' union activity. Furthermore, as part of a
cooperative agreement with the Guatemalan Attorney General's Office,
the International Commission against Impunity in Guatemala (CICIG)
began a review of the 58 cases cited in the ILO complaint to ensure
the adequacy of the investigations.[Footnote 77] According to DOL, as
of June 2014, CICIG had completed its review of 56 cases and concluded
that 6 of the cases indicated a possible link to union activity.
In addition, unions reported other violent acts, such as threats,
bribes, and intimidation against union members. According to union
representatives we interviewed, threats of violence begin with
harassing phone calls to a union leader or member. The union
representative stated that if the phone calls do not get the desired
results, the harassment is escalated to include physical intimidation
and threats of kidnapping. If the physical intimidation fails, then
kidnapping or murder occurs.
Guatemala Has Taken Steps to Prevent and Investigate Violence against
Unionists in Response to ILO Review:
To address the complaint filed by the unions, the ILO initiated the
process to establish commissions of inquiry. To avoid the
establishment of the commission, the government of Guatemala signed a
memorandum of understanding in March of 2013, committing to take
specific steps to address the issues in the complaint and establishing
a plan called the Road Map that outlined the actions needed. In
response, the ILO decided to postpone the establishment of the
Commission of Inquiry and has been working with Guatemala to implement
the Road Map.
According to information that the government of Guatemala provided to
the ILO, as of March of 2014, steps that the government had taken to
address violence against unionists included:
* a cooperative agreement signed with the International CICIG to
support the Public Prosecutor's Office in analyzing cases of violence
against trade unionists;
* the transfer of 20 trained investigators to the Attorney General's
Office and the creation of the new post of assistant prosecutor in the
special unit investigating crimes against trade unionists;
* improvement in the time periods for trial and convictions, including
those for some of the 58 murders reported to the ILO; and:
* submission by the Ministry of the Interior, in the context of
analyzing assaults on trade unionists, of a draft protocol for
implementing immediate and preventive security measures for trade
union leaders, unionized workers, and workers from trade unions in the
process of being established.
Following are descriptions of some of the Guatemalan government's
ongoing efforts to address violence against trade unionists.
Cooperative agreement with CICIG. According to a March 2014 ILO
report, the Guatemalan Attorney General's Office signed a cooperative
agreement with CICIG on September 24, 2013.[Footnote 78] As part of
the agreement, the Attorney General's Office established a
coordination mechanism with CICIG for the analysis of specific cases
of violence against trade union members. CICIG agreed to support the
Attorney General's Office in the analysis of specific cases of
violence against union members, providing recommendations to
strengthen the investigation of those cases. Under the new
coordination mechanism, the 58 murder cases cited in the ILO complaint
were transferred to CICIG to continue the investigation process. In
addition, the Attorney General agreed to cooperate with CICIG in the
analysis of crime trends based on landmark cases of attacks and
violence against union members known to the different units and
offices of the Public Prosecutor's Office.
Additional trained investigators. The Ministry of the Interior and the
Attorney General's Office established interinstitutional links for
cooperation to strengthen the investigations and criminal prosecution.
Through this mechanism, the Ministry of the Interior transferred 20
trained investigators to the Attorney General's Office, with the
effort to provide additional support to investigate cases of violence
against unionists.
Timely trials and convictions. The government of Guatemala has worked
to improve the length of time it takes to bring perpetrators of crimes
to trial and issue convictions. In regard to the 58 murder cases cited
in the ILO complaint, the Attorney General's Office provided an update
of the status of the 28 cases that have been brought to court and
reported that extinction of criminal liability has been applied in 4
cases, arrest warrants have been issued in 13 cases, rulings have been
handed down in 6 cases, and 5 cases are pending trial.[Footnote 79]
Strengthening analysis of attacks against human rights defenders. The
Attorney General's Office restructured and strengthened the unit that
analyzes attacks against human rights defenders, a category that
includes unionists. As part of this process, representatives of
unionized workers will meet regularly to study trends in attacks
against human rights defenders and draw up recommendations for
investigations by the Attorney General Office to assist both criminal
investigations and the conviction of the perpetrators. An adequately
staffed office will be created to carry out the relevant
investigations.
The government of Guatemala reported several other steps it intends to
initiate or has initiated to address the issues in the ILO complaint.
For example, according to the ILO's March 2014 report, the Ministry of
Labor and Social Welfare proposed amendments to the Labor Code and
other relevant laws, incorporating the amendments proposed by the ILO
supervisory bodies.[Footnote 80] The ILO's report stated that
legislative reforms have also been proposed by the Ministry of Labor
to enable the general labor inspectorate to fulfill its mandate to
ensure the effective application of labor legislation. On the basis of
the progress demonstrated in addressing points in the Road Map
reported by the government of Guatemala, the ILO decided in March 2014
to again postpone the implementation of the Commission of Inquiry and
reevaluate progress in November of 2014.
U.S. Government Has Provided Assistance to Guatemala for Law
Enforcement Reform and to Address Violence, Including Violence against
Unionists:
The United States has provided some funding through State's Bureau of
International Narcotics and Law Enforcement (INL) to assist Guatemalan
authorities to provide better protection to unionists. INL provided
Guatemala $2 million dollars in assistance for fiscal years 2012
through 2016 to implement reform and capacity-building projects. The
goal of the INL funding is to increase the investigative capabilities
of law enforcement officers within the Ministry of the Interior. Part
of the funding focuses on defenders of human rights, including
addressing violence against trade unions. Assistance provided by INL
has ranged from the provision of equipment to technical training and
exchanges. For example, INL provided the Ministry of the Interior's
recently established security division, División de Protección de
Personas y Seguridad (DPPS), with filing cabinets to organize files on
union leaders for which it was providing protection. INL officials
stated that DPPS lacked a tracking system and had rooms stacked with
disorganized files and, as a result, could not accurately track the
number of people receiving protection. According to INL officials, as
of December 2013, DPPS was providing protection for about 1,000 union
leaders and members. INL officials also stated that they had discussed
the possibility of creating a risk analysis unit in DPPS, similar to
Colombia's UNP.
[End of section]
Appendix III: U.S. Monitoring of Implementation of Other Labor
Initiatives:
In addition to being responsible for monitoring partner countries'
implementation of free trade agreement (FTA) labor provisions, U.S.
agencies are responsible for monitoring the implementation of labor
initiatives such as the White Paper[Footnote 81] and the Labor Action
Plan,[Footnote 82] which were developed in the context of,
respectively, the Dominican Republic-Central America-United States
Free Trade Agreement (CAFTA-DR) and the United States-Colombia Trade
Promotion Agreement (Colombia FTA).[Footnote 83] U.S. agencies are
also responsible for monitoring Guatemala's Labor Enforcement Plan,
developed in response to a CAFTA-DR labor submission to the Department
of Labor (DOL).[Footnote 84]
CAFTA-DR White Paper:
To discharge its responsibility for monitoring implementation of the
CAFTA-DR White Paper projects, in 2007 DOL provided a $10 million
grant to the International Labour Organization's (ILO) Verification
Project.[Footnote 85] The Verification Project prepared reports every
6 months from 2005 through 2010 regarding the implementation of the
White Paper projects. The Verification Project and most White Paper
projects concluded in 2012.
The ILO Verification Project tracked spending and implementation of
every White Paper project, requiring grant recipients to submit
periodic reports to ILO for the biannual report. ILO staff provided
the reports to DOL, which used the reports to ensure transparency and
progress of the U.S.-funded projects. Entities implementing White
Paper projects included, among others, the U.S. Agency for
International Development (USAID), partner countries' ministries of
labor and labor courts, and nongovernmental organizations. According
to ILO staff, although the Verification Project did not measure the
impact of the projects on labor conditions, the reports reflected
improvements of government institutions and other entities and
demonstrated the benefit of addressing some issues faced by workers.
ILO officials noted that, besides providing accountability for the
expenditure of funds and tracking the progress of projects, the
Verification Project led to improvements in data gathering and
reporting capabilities of the ministries of labor.
Colombia Labor Action Plan:
The Office of the U.S. Trade Representative (USTR), in cooperation
with DOL and the Department of State (State), is responsible for
monitoring the implementation of the Colombia Labor Action Plan, most
of which Colombia was required to implement by 2012. The plan listed
steps to improve labor conditions, mutually agreed on by the U.S. and
Colombian governments, that the Colombian government agreed to take
before the President of the United States would put the FTA forward
for congressional consideration. The conditions that the Labor Action
Plan addressed included violence against Colombian labor union
members, inadequate efforts to bring to justice perpetrators of crimes
against labor union members, and insufficient protection of workers'
rights in Colombia. According to USTR staff, the plan continues to
serve as a framework for cooperation with Colombia. The plan includes
regular meetings between officials from both countries to monitor and
implement the plan through 2013, and both governments announced an
extension of these meetings through at least 2014.
On April 2012, USTR announced that the Colombian government had taken
important steps to fulfill the Labor Action Plan and that the FTA
would go into effect. USTR officials did not provide records or
documentation of these steps, stating that they did not request such
records because the website for the Presidency of Colombia supplied
documentation of all actions taken. On reviewing some of the
documentation on the website, we found that the documents were not
structured so as to readily provide information about steps that the
Colombian government had taken to meet its Labor Action Plan
commitments. In written responses to our questions, Colombia's
Ministry of Labor indicated that the government had met all Labor
Action Plan commitments, and the ministry provided examples of the
government's actions to meet these commitments.
USTR officials reported that USTR, DOL, and State had engaged
extensively with the Colombian Ministry of Labor and other government
institutions in Colombia to discuss and confirm Colombia's progress in
implementing each element of the Labor Action Plan. According to USTR,
as of August 2014, USTR and DOL staff had made seven visits to
Colombia since the FTA entered into force to address these issues.
USTR fact sheets and a USTR and DOL report from April 2014 provided
information about Colombia's accomplishments under the Labor Action
Plan--for example, the report detailed the number of labor inspectors
hired, the number of special prosecutors and investigators hired, and
the number of convictions in cases of violence against labor leaders--
as well as remaining challenges. In addition, according to DOL, a DOL
staff member, detailed to the U.S. embassy in Bogota from 2011 to 2012
to oversee implementation of the Action Plan, met during that period
with Colombian government officials, nongovernmental organizations,
union representatives, and other stakeholders to discuss the Labor
Action Plan's implementation, among other topics.
Guatemala Enforcement Plan:
USTR, in cooperation with DOL and State, is responsible for monitoring
implementation of the Guatemala Enforcement Plan, agreed to by the
U.S. and Guatemalan governments in April 2013, to address concerns
identified in a labor submission filed under CAFTA-DR. USTR provided
us with internal documents that it had used to track Guatemala's
progress in taking the steps required by the plan. For example, USTR
provided a matrix tracking the status of legal instruments required
under the Enforcement Plan; USTR also provided quarterly progress
reports submitted by the Guatemalan Ministry of Labor, identifying
steps that the ministry had taken to address commitments in the
Enforcement Plan. USTR officials said that since 2009, USTR and DOL
had directly engaged with Guatemala on the labor case through 17
trips, including 7 trips that involved staff at the Assistant
Secretary level or higher. In addition, officials at the Guatemalan
Ministry of Labor told us that they had interacted extensively with
DOL and USTR, including through multiple video-teleconferences,
meetings in person, and correspondence, to update them on progress in
implementing the Enforcement Plan.
In April 2014, USTR told us that although it recognized steps that
Guatemala had taken under the Enforcement Plan, it had not seen
sufficient progress to close the case. USTR officials stated that if
the Guatemalan government did not take the steps delineated in the
plan by the specified dates, USTR might decide to pursue arbitration.
In September 2014, USTR announced that the U.S. government was
pursuing dispute settlement proceedings against Guatemala because it
had not met the terms of the Enforcement Plan.
[End of section]
Appendix IV: Status of Labor Submissions:
The following provides details about the status of the five labor
submissions that the Department of Labor (DOL) has accepted since
2008.[Footnote 86]
Bahrain:
In June 2011, DOL accepted a labor submission regarding Bahrain, 50
days after receipt. The submission remains open, with consultations
ongoing. The submission, received from the American Federation of
Labor and Congress of Industrial Organizations (AFL-CIO) with a
statement from the General Federation of Bahrain Trade Unions, alleged
that Bahrain had violated free trade agreement (FTA) labor provisions
regarding the right of association, particularly nondiscrimination
against trade unionists. In December 2012, DOL issued a public report
that found that the government of Bahrain's actions appeared
inconsistent with its commitments under the labor chapter.
Specifically, the report found that trade unionists and leaders were
targeted for dismissal, and in some cases prosecuted, in part for
their role in organizing and participating in a general strike and
that the dismissals reflected discrimination based in part on
political opinion and activities. The report also found sectarian
discrimination against Shia workers. The Department of Labor's (DOL)
report outlined nine recommendations focused on legal and
administrative changes to Bahraini labor law for the U.S. government
to pursue during consultations with Bahrain and also recommended that
the parties develop a plan of action.
On May 6, 2013, more than 4 months after DOL issued its report, the
U.S. government formally requested cooperative labor consultations
with the government of Bahrain in a joint letter from the Acting
Secretary of Labor and the Acting U.S. Trade Representative.
Consultations began when an interagency delegation met with the
government of Bahrain in Manama, Bahrain, on July 15 and 16, 2013.
However, according to DOL, the first round of consultations did not
resolve all issues DOL had identified, and consultations were ongoing
as of September 2014. The Office of the U.S. Trade Representative
(USTR) attempted to schedule second-round consultations but agreed to
a request from Bahrain to delay them. The United States and Bahrain
held a second round of consultations on June 22 and 23, 2014,
according to DOL. During the consultations, the two parties used the
recommendations in the DOL report as a basis for jointly developing an
action plan, which includes concrete steps for the government of
Bahrain to address the concerns that the report raises. USTR officials
noted that the allegations raised in the submission are subject to
resolution through the consultation procedures but are not subject to
dispute settlement.[Footnote 87]
Figure 5 shows the timeline and status of the Bahrain labor submission.
Figure 5: Timeline and Status of Labor Submission Regarding Bahrain:
[Refer to PDF for image: timeline]
Bahrain:
04/11: DOL receives submission.
06/11: DOL accepts submission for review.
12/12: DOL issues public report, recommending that U.S. government
request formal consultations.
05/13: USTR requests formal consultations with Bahrain.
07/13: First round of consultations is held.
06/14: Second round of consultations is held.
08/14: Submission remains open while U.S. government engages in
consultations with Bahrain.
Source: GAO analysis of Department of Labor information. GAO-15-160.
DOL: U.S. Department of Labor.
[End of figure]
Dominican Republic:
In February 2012, DOL accepted a labor submission regarding the
Dominican Republic, 62 days after receipt. The submission remains open
and unresolved while DOL monitors the Dominican Republic's progress in
addressing concerns that the submission raises. The submission,
submitted by a private individual, alleged the failure of the
Dominican Republic's government to enforce its labor laws in the sugar
sector as required under the Dominican Republic-Central America-United
States Free Trade Agreement (CAFTA-DR). The submission alleged nine
violations, ranging from human trafficking and forced labor to
retaliatory firing of workers for affiliation with, or attempts to
organize, labor groups or unions. In September 2013, DOL issued a
public report that found evidence of apparent and potential violations
of the Dominican Republic's labor laws pertaining to the sugar sector.
DOL's report also identified significant concerns about procedural and
methodological shortcomings in the inspection process that undermine
the government's capacity to effectively identify labor violations. In
addition, the report cited concerns regarding freedom of association,
the right to organize, and collective bargaining. DOL's report offered
11 recommendations to the government of the Dominican Republic to
address the report's findings and improve enforcement of Dominican
labor laws in the sugar sector and stated that DOL would reassess the
situation in 6 and 12 months after the report's publication. The
recommendations range from administrative changes to help the
government of the Dominican Republic improve its enforcement of
Dominican labor laws to outreach suggestions for better informing
sugar sector workers about their labor rights.
In April 2014, DOL issued its 6-month assessment, noting that the
Dominican Republic's Ministry of Labor had committed to measures that,
if instituted, would begin to address some of the recommendations in
DOL's public report. DOL's assessment also noted that the government
of the Dominican Republic had not yet indicated plans or taken actions
to address most of the public report's recommendations.
Figure 6 shows the timeline and status of the Dominican Republic labor
submission.
Figure 6: Timeline and Status of Labor Submission Regarding the
Dominican Republic:
[Refer to PDF for image: timeline]
Dominican Republic:
12/11: DOL receives submission.
02/12: DOL accepts submission for review.
06/12: DOL requests public comments and publishes request in Federal
Register.
09/13: DOL issues public report with recommendations and gives the
Dominican Republic 6 months to address the recommendations.
09/14: Submission remains open while U.S. government engages with
Dominican Republic to address the recommendations.
Source: GAO analysis of Department of Labor information. GAO-15-160.
DOL: U.S. Department of Labor.
[End of figure]
Guatemala:
In June 2008, DOL accepted a submission regarding Guatemala, 50 days
after receipt. The submission remains open and unresolved and is
currently in arbitration. The submission, from the AFL-CIO and six
Guatemalan worker organizations, alleged that Guatemala had violated
its obligation under CAFTA-DR to effectively enforce its labor laws
regarding freedom of association, the rights to organize and bargain
collectively, and acceptable conditions of work. In January 2009, DOL
issued a public report that found significant weaknesses in
Guatemala's labor law enforcement. The report outlined 10
recommendations for the government of Guatemala, including
administrative and technical changes, to address the issues raised in
the submission. The report also recommended that DOL reassess
Guatemala's progress in implementing the recommendations within 6
months after the publication of DOL's report to determine whether
further action is warranted.
USTR and DOL engaged with the Guatemalan government in an effort to
address DOL's recommendations for systemic improvements in the
enforcement of labor laws in Guatemala. In July 2010, after
Guatemala's actions proved insufficient to address the concerns raised
in the report, USTR and DOL jointly requested cooperative labor
consultations with Guatemala under the CAFTA-DR Labor Chapter. The
consultations failed to resolve the matter, and on May 16, 2011, USTR
requested a meeting of the CAFTA-DR's free trade commission pursuant
to the agreement's Dispute Settlement Chapter. The commission met in
June 2011 but did not resolve the dispute, and in August 2011, the
United States requested the establishment of an arbitral panel. After
the panel was constituted in November 2012, the parties agreed to
suspend it to allow for additional negotiation. In April 2013, the
parties reached agreement on a comprehensive 18-point Enforcement Plan
with concrete benchmarks and timelines for implementation. The plan
extended the arbitration panel's suspension for 6 months, with the
possibility of an additional 6-month extension based on Guatemala's
progress in implementing the plan. In October 2013, 6 months after the
signing of the Enforcement Plan, USTR, in consultation with DOL,
determined that Guatemala had taken sufficient steps to enact the
legal instruments called for under the plan. USTR and DOL granted the
6-month extension, noting that significant work remained to ensure the
full implementation of the Enforcement Plan.
In April 2014, USTR, in consultation with DOL, granted Guatemala a 4-
month extension to continue its implementation of the Enforcement Plan
but retains the right to reactivate the arbitration panel at any point
during this period. In September 2014, the United States reactivated
the panel after determining that Guatemala had not met the terms of
the Enforcement Plan and that concerns over the enforcement of
Guatemala's labor laws had not been resolved.
Figure 7 shows the timeline and status of the Guatemala labor
submission.
Figure 7: Timeline and Status of Labor Submission Regarding Guatemala:
[Refer to PDF for image: timeline]
Guatemala:
04/08: DOL receives submission.
06/08: DOL accepts submission for review.
01/09: DOL issues report without recommending consultations.
06/09: DOL reassesses and concludes Guatemala has made insufficient
progress.
07/10: USTR requests formal consultations with Guatemala.
08/11: Consultations fail; USTR requests arbitration panel.
11/12: Arbitration panel is constituted.
04/13: Arbitration panel suspended in lieu of an Enforcement Plan.
10/13: Enforcement Plan deadline for adoption of recommendations.
04/14: USTR grants Guatemala 4-month extension.
09/14: U.S. government reconvenes arbitration panel.
Source: GAO analysis of Department of Labor information. GAO-15-160.
DOL: U.S. Department of Labor;
USTR: Office of the U.S. Trade Representative;
CAFTA-DR = United States-Dominican Republic-Central America Free Trade
Agreement.
[End of figure]
Honduras:
In May 2012, DOL accepted a submission regarding Honduras, 49 days
after receipt. The submission remains open and unresolved, pending
publication of DOL's report. The submission, from the AFL-CIO and 26
Honduran organizations, alleged that the government of Honduras had
violated its obligation under CAFTA-DR to enforce its labor laws
relating to freedom of association; the right to organize; child
labor; the right to bargain collectively; and the right to acceptable
conditions of work in the Honduran apparel and auto manufacturing,
agriculture, and port sectors. According to DOL officials, DOL has
received over 1,200 documents in Spanish and visited Honduras four
times to meet with stakeholders, reflecting the breadth of the
allegations and detailed information reviewed and analyzed. As of May
2014, DOL was continuing to review documentation of the allegations
and, according to DOL officials, is preparing its report.
Figure 8 shows the timeline and status of the Honduras labor
submission.
Figure 8: Timeline and Status of Labor Submission Regarding Honduras:
[Refer to PDF for image: timeline]
Honduras:
03/12: DOL receives submission.
05/12: DOL accepts submission for review.
11/12: DOL extends the period of review for submission.
09/14: Submission remains open while DOL collects and analyzes
information related to the submission. DOL is unable to estimate when
it will issue public report.
Source: GAO analysis of Department of Labor information. GAO-15-160.
DOL = U.S. Department of Labor.
[End of figure]
Peru:
In July 2011, DOL accepted a submission regarding Peru, 202 days after
receipt, which DOL closed as resolved in August 2012. The submission,
from the Peruvian National Union of Tax Administration Workers
(SINAUT), alleged that Peru's National Superintendency of Tax
Administration (SUNAT), an executive branch agency of the Peruvian
government that oversees both customs and tax administration, had
failed to comply with Peru's labor laws as they relate to collective
bargaining, in violation of the United States-Peru Trade Promotion
Agreement. In August 2012, DOL issued a public report finding that
although the Ministry of Labor and Promotion of Employment appeared to
have fulfilled its duties during the collective bargaining processes
at issue, SUNAT had failed to comply with certain elements of the
Peruvian Collective Bargaining Law, including deadlines for launching
negotiations. Further, with regard to all other issues raised in the
submission, DOL determined that important legal ambiguity during the
period at issue prevented a finding that SUNAT had failed to comply
with the law or that the government of Peru had failed to comply with,
or enforce, its own labor laws during that time. DOL's report did not
recommend formal consultations between the U.S. government and the
Peruvian government. According to DOL, because the government of Peru
had taken important steps to address some of the issues raised in the
submission, including issuing legal instruments to help clarify legal
ambiguity and facilitate collective bargaining, DOL did not believe
that formal consultations were needed to continue positive engagement
and progress on these matters. As a result, DOL closed the submission
as resolved in August 2012.
In September 2011, according to DOL, while it was reviewing the
submission, the government of Peru issued two executive orders that
clarified the parties' collective bargaining duties in this and
similar cases. DOL's report on the submission explained that on March
29, 2012, after applying the recent executive orders, an arbitral
panel reached a decision favorable to SINAUT that contained both
economic and noneconomic awards for the union. Moreover, DOL reported
that the government of Peru appealed the ruling, contending that the
ruling reflects a misapplication and misinterpretation of the Public
Sector Budget Law. According to the DOL report, on appeal, the
Peruvian labor courts overturned the economic elements of the arbitral
award, based on a ruling that those elements conflicted with Peru's
Public Sector Budget Law, but sustained the noneconomic elements of
the award.
Figure 9 shoes the timeline and status of the Peru labor submission.
Figure 9: Timeline and Status of Labor Submission Regarding Peru:
[Refer to PDF for image: timeline]
Peru:
12/10: DOL receives submission.
07/11: DOL accepts submission for review.
01/12: DOL extends submission review period.
08/12: DOL issues public report without recommendations, concluding
Peru has independently taken sufficient steps, and closes submission.
Source: GAO analysis of Department of Labor information. GAO-15-160.
DOL = U.S. Department of Labor;
USTR = Office of the U.S. Trade Representative.
[End of figure]
[End of section]
Appendix V: Comments from the Office of the U.S. Trade Representative:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
Executive Office of The President:
Office of The United States Trade Representative:
Washington, D.C. 20508:
September 16, 2014:
Mr. Loren Yager:
Managing Director:
International Affairs and Trade:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Yager:
We appreciate the opportunity to comment on the draft of the
Government Accountability Office's (GAO) report, Free Trade
Agreements: u.s. Partners are Addressing Labor Commitments, but More
Monitoring and Enforcement are Needed (Report) and the recognition
that U.S. trade agreements have resulted in improved labor laws and
working conditions in trading partner countries. This has been, in
great part, a direct result of proactive and coordinated efforts by
USTR, the U.S. Department of Labor (DOL) and other U.S. agencies,
working together with congressional and other stakeholders and
international partners, such as the International Labor Organization
(ILO).
The Obama Administration has made unprecedented efforts to maximize
the use of the tools available in our free trade agreements (FTAs) to
address labor concerns in trading partner countries. GAO has
recognized many of these efforts in its past reporting on enforcement of
labor provisions of our FTAs. For example, in 2012, GAO conducted an
assessment of how USTR and DOL had implemented recommendations in an
earlier report entitled International Trade: Four FTAs GAO Reviewed
Resulted in Commercial Benefits, but Challenges on Labor and
Environment Remain. That assessment covered many of the same issues as
in this report as well as an overlapping period of time (from 2009 to
2012). In the 2012 assessment, GAO reported that it had "seen steady
progress" in USTR and DOL's efforts to implement, enforce, monitor,
and report on compliance with and progress under the FTA's labor
provisions. GAO also found that, "Labor and USTR have intensively
engaged current FTA partners .... This has involved monitoring and
assessing their current labor laws and practices, as well as engaging
with them directly on how our existing agreements have worked in
practice."
In the course of this investigation, we too have surveyed our
monitoring and enforcement efforts in recent years and have gained
important insights that will inform our efforts to continue to
strengthen our monitoring and enforcement efforts. In that vein, we
embrace the GAO's recommendations to improve our coordination with the
Departments of Labor and State to identifY and address areas of
concern and to ensure that our reporting to Congress effectively
reflects the results of these efforts.
However, in our review of GAO's draft report, we have also found a
number of important areas in which the GAO's reporting on agencies'
activities is factually incorrect and at odds with GAO's own earlier
assessments. We have identified specifically the areas of inaccuracy,
supplied a large volume of documents to GAO to support revision of the
report, and made our staff available for technical assistance.
Unfortunately, in many cases, GAO has disregarded the submitted
information without explanation and has declined our most recent
offers to meet. We would welcome the opportunity to engage further
with GAO to ensure that its final report is factually accurate. [See
comment 1]
Systematic Monitoring and Enforcement:
Contrary to the unsupported assertion of the draft report, USTR and
DOL engage in monitoring and enforcement activities in each of the FTA
countries. These activities are tailored to the unique circumstances
of each country, taking into account such factors as the nature of the
labor situation in the country, priorities of stakeholders, engagement
opportunities, and the level of cooperation we have from governmental
and non-governmental actors on the ground. The GAO draft suggests a
five-element framework for monitoring and enforcement: (l) gathering
facts from credible and reliable sources, (2) identifying compliance
problems, (3) setting priorities, (4) developing and implementing
responses, and (5) taking enforcement actions. That is precisely what
we and DOL do. [See comment 2]
Monitoring and enforcement of FTA labor provisions covers a large
spectrum of activities. For example, we work with U.S. Embassies to
monitor conditions on the ground--such as what local unions and
workers are reporting, what the country's labor ministry (or
equivalent) has been concerned about or the kinds of issues that are
being raised with local authorities by stakeholders. As evidence, the
U.S. Department of State provided GAO with a large number of cables
documenting this kind of monitoring. USTR and DOL routinely receive
and analyze information such as this - as well as information directly
from local and U.S. stakeholders (both workers and businesses), and
international partners such as the ILO - about labor conditions on
the ground. [See comment 3]
In an additional proactive step, DOL has funded the placement of labor
officers in certain U.S. Embassies to collect and assess facts and
support the implementation of our efforts to address concerns. DOL has
placed such officers in Colombia and Bangladesh, and is looking to
expand to other countries with which the United States has
particularly close engagement on labor issues. All of the information
gathered through labor and other embassy officials, stakeholders,
and international partners is important to our systematic assessment
of the labor conditions on the ground and whether there are any
problem issues that may raise concerns under our FTAs. Where such
problems come to our attention, whether through informal or formal
(e.g., a labor submission) means, we deploy a range of tools to seek
to resolve the concerns. Almost always, however, we start with
informal engagement such as informal dialogue and consultations, often
through the channels established under the FTA, with our trading
partner country. In many cases, such as Jordan and Peru, such
engagement has helped us determine and implement strategies for
addressing the concerns. Where the use of such informal tools is
insufficient, however, we also look to the use of dispute settlement
under the FTA to seek to address the concerns. In every case, however,
whether with informal or formal engagement, our goal remains exactly
the same - to seek to address the concern that we have identified.
Our monitoring and enforcement activities are concentrated in certain
countries. These countries include those with respect to which we have
received formal labor submissions filed by stakeholders (Bahrain, the
Dominican Republic, Guatemala, Honduras and Mexico) as well as a
number of other countries in which we have concerns or potential
concerns, but have received no formal labor submission. Colombia,
Jordan, Panama and Peru[Footnote 1] are just four examples that are
detailed in the submissions that we have provided to GAO over the last
year, and are discussed in summary below (based on those submissions):
[See comment 4]
Colombia: USTR and DOL worked closely with Congressional stakeholders
and the Government of Colombia before the United States-Colombia FTA
was sent to Congress to identify and catalog concerns relating to the
FTA labor obligations, including the core obligation of adopting and
maintaining fundfu'11entallabor rights. We worked cooperatively to put
together an Action Plan that identified concrete steps that Colombia
could take to address the concerns. Colombia took key actions to
implement the Action Plan before the Colombia FTA was submitted to
Congress for a vote, and took further steps after passage and
implementation. [See comment 5]
The work with Colombia did not end with ratification of the FTA, as
GAO suggests in the draft report. For example, from 2011 to 2012,
subsequent to the ratification of the FTA, a DOL officer was detailed
to the U.S. embassy in Bogota to oversee implementation of the Action
Plan during the first year of operation of the FTA and Action Plan.
USTR and DOL have also made seven visits to Colombia (four jointly and
three by DOL) since the FTA entered into force in May 2012 to assess
conditions on the ground and address implementation-related issues. In
addition, Colombian officials have made numerous trips to the United
States to meet with USTR, DOL and State Department officials on
matters relating to implementation and to consult with Members of the
U.S. Congress who have historically had, and continue to have, a
strong interest in monitoring implementation of the U.S.-Colombia FTA,
including members of the Congressional Monitoring Group on Labor
Rights in Colombia (CMG). USTR and DOL have also had extensive
engagement with the CMG and work closely with that group and with
organizations like the Solidarity Center and with the ILO on issues of
concern in Colombia. [See comment 6]
The GAO draft report details much of the work that USTR and DOL are
doing on labor monitoring and enforcement in Colombia in an annex, but
does not recognize this work as evidence of USTR and DOL's
"systematic" work on labor monitoring and enforcement. GAO
counterintuitively suggests that USTR and DOL efforts in Colombia are
"unique to the U.S.Colombia FTA" and therefore not appropriate for GAO
to consider in its analysis on labor monitoring and enforcement. GAO
also suggests that our level of cooperation with Colombia "is not
present in any of the other FTAs." In fact, there are numerous other
PTA countries with
which USTR and DOL have had extensive engagement on labor concerns and
with which we have had (or are developing) implementation strategies
and plans similar to the Colombia Action Plan, including Jordan,
Bahrain, and Panama.
The specific level and type of engagement on labor issues in each of
our PTA partner countries is tailored to the unique situation and
needs in each country. There have been fewer labor issues raised with
respect to Canada, Australia, Singapore, and Chile, for example, than
with respect to Colombia. It is not surprising, therefore, that we
have more extensive engagement with Colombia than with Canada. We
disagree with GAO's assumption that tailored, country-specific
approaches to labor monitoring and enforcement should be excluded from
GAO's evaluation of our monitoring and enforcement efforts. [See
comment 7]
Peru: In the lead-up to Congressional consideration of the Peru PTA,
Peru made a number of reforms to its labor laws and practices to bring
itself into compliance with the commitments it had undertaken in the
PTA. After ratification, USTR and DOL have systematically monitored
Peru's implementation of its FTA commitments - including, importantly,
commitments relating to the labor rights of temporary and
subcontracted workers. Since January 2009, when the Peru FTA went into
force, USTR and DOL have taken three trips, and held several video and
phone conferences with Peruvian officials to monitor these issues, as
well as countless informal contacts through calls and emails and day-
to-day monitoring in conjunction with U.S. Embassy officials on the
ground.
More recently, in August 2014, USTR traveled to Peru to meet with
labor officials and stakeholders on recent reforms to Peru's labor
code regarding Occupational Safety and Health and fines for labor
violations, which have raised concerns from labor stakeholders in the
United States and Peru. USTR and DOL will hold a Labor Affairs Council
meeting and open public session in Peru in October 2014, to follow up
on the previous commitments as well as the new labor reforms.
USTR and DOL have provided GAO with a large number of documents
demonstrating the engagement with Peru to assess conditions on ground,
monitor implementation of the changes made in 2007 to come into
compliance with the PTA, and examine more recent changes. GAO argues
that it has chosen not to evaluate this evidence because "in Colombia,
Panama, and Peru, USTR has engaged with the country to ensure that it
fulfills commitments to take certain steps in anticipation of the
FTA's ratification, rather than to address specific issues related to
compliance with PTA labor provisions." This is simply incorrect and
reflects a fundamental lack of understanding of the tools that we have
used through trade agreements to improve labor conditions on ground.
[See comment 8]
First, the steps Colombia, Panama, and Peru took in anticipation of
the ratification of each country's FTA were steps "to address specific
issues related to compliance with PTA labor provisions." This is an
ordinary part of any FTA process -- before an FTA goes into effect, an
FTA partner must bring its laws and practices into compliance with the
obligations under an FTA In some cases, these steps are taken after
ratification and before entry into force of an FTA But in the case of
the labor chapters of Colombia, Panama and Peru, Congressional
stakeholders asked that most of the steps be taken before, and as a
condition to, sending the FTAs to Congress for a vote. This fact is
clear from the extensive documentation publicly available regarding
each FTAs passage. For example, the Ways and Means Committee report
for the Peru FTA (issued at the time of Congressional consideration)
notes that:
Peru has already been bringing its laws, regulations, and practices
into compliance with internationally-recognized labor standards. Most
recently, in August 2007, Peruvian President Alan Garcia anllOlL11ced
his commitment to change Peru's legal framework in a number of key
areas to implement obligations under the FTA President Garcia has
since followed through on his commitment by implementing changes to
the legal framework governing: (1) temporary employment contracts;
(2) subcontracting/outsourcing contracts; (3) the right of workers to
strike; (4) recourse against anti-union discrimination; and (5)
workers' right to organize. The Committee applauds the changes made by
the Peruvian government. The Committee believes that, with these and
other recent changes, and the commitments and mechanisms under the
FTA, Peru has in place a framework to ensure compliance with basic
international labor standards.[Footnote 2]
Second, as evidenced in the large number of documents supplied to GAO
over the past year and as detailed in summary form here, USTR and DOL
monitoring and enforcement efforts in Colombia, Peru and Panama - as
well as other FTA countries - have extended long past ratification.
Indeed, as discussed above, a USTR delegation has just returned from
Peru having engaged that country's government on certain recent labor
law reforms and USTR/DOL will be holding a Labor Affairs Council
meeting next month to engage further with Peruvian counterparts on
these and other labor issues. Congress considered the Peru FTA seven
years ago, in 2007.
Panama: Working together with key Congressional Members, USTR and DOL
pressed Panama to enact a series of administrative and legal changes
to address labor concerns as part of the FTA ratification process in
2011. As with Peru, these steps were needed to address issues relating
to compliance with the FTA labor obligations. As a 2012 report by the
Congressional Research Service explains, a variety of labor issues,
including issues relating to Panama's enforcement of ILO fundamental
rights, "were cited by Members of Congress as needing to be addressed
before the FT A could be considered.[Footnote 3]
In response to efforts by USTR and DOL, Panama issued decrees and
reformed labor laws, including to improve labor protections for
subcontracted and temporary workers, and to remove restrictions to
collective bargaining and strikes in Export Processing Zones. As Ways
and Means Trade Subcommittee Ranking Member Levin stated in April
2011, "despite our active efforts in discussions with the previous
Panamanian Government to fully meet [internationally recognized
labor] standards - as spelled out in the May 10 agreement - they did
not do so .... The Obama Administration has now worked with the new
Panamanian Administration to take the necessary steps before asking
action by Congress."
Since entry into force of the FTA in 2012, USTR and DOL have actively
monitored the implementation of Panama's labor commitments through two
trips and multiple video and phone conferences, including a meeting of
the Labor Affairs Council in January 2014 - in addition to informal
contacts through calls and emails and day-to-day monitoring in
conjunction with U.S. Embassy officials on the ground. In addition,
the United States~Panama Free Trade Commission under the FTA met in
May 2014, and discussed Panama's labor commitments and progress since
entry into force. Since then, the U.S. Ambassador to Panama met with
the Labor Minister in July 2014 and discussed potential technical
assistance to support implementation of the labor commitments. USTR
and DOL are currently discussing potential assistance to train labor
inspectors in Panama on labor conditions, child labor, and minimum
wage compliance, and exploring a monitoring trip to Panama for late
2014.
Jordan: In January 2013, more than 11 years after the entry into force
of the Jordan FTA, concerns regarding foreign workers in Jordan's
garment sector led USTR and DOL to negotiate and sign an
Implementation Plan with the Government of Jordan. USTR and DOL have
been monitoring the implementation of the plan since then, including
through a monitoring trip in June 2014, which included site visits to
several factories and worker dormitories. The plan includes specific
measures by the Government of Jordan to address union rights for foreign
workers, workplace discrimination including sexual harassment and
living conditions in worker dormitories. In addition, the U.S.
Department of Labor signed a Memorandum of Understanding with the
Government of Jordan in December 2013 to develop a Labor Cooperation
mechanism that establishes priorities for cooperative activities on
labor matters. As part of this cooperation, DOL is funding the ILO
Better Work program that monitors and reports publicly on worker
rights and working conditions in more than 90 percent of factories
with foreign workers in Jordan.
USTR and DOL also traveled to Jordan in June 2014 to engage directly
with Jordanian senior officials on the Implementation Plan and the
MOU, including by convening the FTA Labor Subcommittee. The
Subcommittee held in-depth discussions on several topics related to FTA
labor commitments, including: (1) activities to strengthen
institutional capacity and labor law enforcement and compliance; (2)
child labor and the protection of vulnerable populations; and
(3) protections against gender discrimination and sexual harassment in
the workplace, occupational safety and health, and the promotion of
tripartite social dialogue. The Subcommittee meeting also included a
public session and roundtable discussion with stakeholders from
Jordan's worker organizations, businesses, international buyers and
other interested parties, to foster direct dialogue with civil society
and a broader participatory process.
These examples - and the numerous others that USTR and DOL have
detailed for GAO and for which USTR and DOL have provided supporting
documentation - demonstrate USTR and DOL's extensive monitoring and
enforcement of FTA labor provisions. This docUmentation contradicts
the assertions in GAO's draft report about a lack of systematic
efforts to address labor concerns in partner countries.
Labor Submissions: The GAO draft report incorrectly states that USTR
and DOL restrict their monitoring and enforcement activities largely
to FTA countries about which stakeholders have submitted a formal
labor submission. As detailed in submissions to GAO over the past year,
USTR and DOL have engaged in systematic monitoring and enforcement
efforts in other countries for which there have not been formal labor
submissions such as Colombia, Peru, Panama and Jordan.
Moreover, GAO fails to acknowledge that the labor submission process
is a central component of the framework in our FTAs for systematic
monitoring and enforcement of labor obligations. In fact, Labor and
Environment are the only FTA chapters that allow for a formal process to
consider stakeholder submissions. Congress and numerous stakeholders
view the submission process as a critically important element in our
FTAs. And stakeholders often invest significant resources in putting
together submissions, such as the AFL-CIO submissions relating to
Guatemala and Honduras. By design, these submissions are an important
factor in how we prioritize engagement efforts and resources. [See
comment 9]
While submissions may help alert USTR and DOL to specific problems and
to signal that these are priority issues for stakeholders, there is
extensive engagement required of USTR and DOL to assess the facts and
make our own determinations of whether there are problems of
noncompliance and how best to address those problems. Some submissions
provide extensive information on labor issues in the subject country,
while other submissions provide only sUll1illary information and/or
allegations. In either case, we do not rely on what is presented in a
submission alone to identify problems, decide how to proceed, and take
appropriate actions. In the cases of Bahrain and the Dominican
Republic under CAFTA-DR, for example, USTR and DOL undertook extensive
additional work to obtain, analyze and verify the allegations found in
the summary documents provided by the submitters. Even in the case of
Guatemala, for which was a detailed submission with several documented
cases was provided in 2008, USTR and DOL have undertaken an
unprecedented fact-finding process in the years since, and have gathered
extensive additional information to put together formal pleadings. To
be precise, since 2009, USTR and DOL have directly engaged with
Guatemala on the labor case through 17 trips, of which seven were at
the Assistant Secretary level or above. In addition, there have been
more than two dozen interagency video and conference calls with
Guatemala to engage on the submission and enforcement plan. [See
comment 10]
Interagency Coordination: The GAO draft Report also states that there
is no "systematic approach" among agencies for labor monitoring and
enforcement. This assertion, once again, is not supported by the
facts. USTR coordinates and monitors compliance with FTA labor
provisions with DOL and other agencies in many ways, including through
the TPSC Subcommittee on Labor Monitoring and Enforcement, ad hoc
interagency groups for each FTA partner country with labor concerns,
regular engagement with labor stakeholders through the Labor Advisory
Committee, as well as in extensive briefings with Congress, and
through regular day-to-day contacts such as emails, phone calls and
meetings. The agencies regularly use all of the channels described
above to discuss and coordinate an appropriate response on behalf of
the U.S. government. None of the agencies approaches a labor issue in
isolation and without such coordination. [See comment 11]
USTR provided GAO with evidence of our coordinated interagency
approach in well-documented action plan efforts with Colombia and
Jordan, and also in engagement with Panama and Peru. USTR also
coordinates regularly with labor union representatives through
meetings of the Labor Advisory Committee for Trade Policy and
Negotiations, chaired by the U.S. Trade Representative and the
Secretary of Labor, as well as in regular meetings with labor
advisors. In all of these venues, USTR both seeks and shares detailed
information on concerns in FTA countries, and works to develop
approaches to resolve issues.
USTR Annual Reports: The GAO draft Report states that USTR does not
include information in its annual report to Congress on FTA partner
country compliance with labor provisions that have not been subject to
a labor submission, and that this limits Congress' information on
these issues. In fact, USTR's annual report provides country-specific
infoffi1ation on labor issues. In our most recent annual report, for
example, we included itemized labor activities for: Bahrain, the
CAFT A-DR countries (overall and on a country-specific basis for
Guatemala, the Dominican Republic and Honduras), Chile, Colombia,
Jordan, Korea, Morocco, the NAFTA countries, Oman, Panama, and Peru.
Our annual report does not, however, explicitly accuse countries of
trade violations. There are a number of reasons for this policy, both
legal and policy-based: [See comment 12]
* First, it is difficult for us to determine consistency with
international trade obligations definitively before formal
consultations with the trading partner in question. Such confidential
consultations allow us to evaluate the practice of partners in greater
detail.
* Second, Article 23(2)(1) of the WTO Dispute Settlement Understanding
states that Members "shall not make a determination to the effect that
a violation has occurred ... except through recourse to dispute
settlement."
* Third, public assertions of non-compliance create pressure to
prematurely disclose sensitive legal reasoning, which could undermine
our ability to pursue the most vigorous enforcement of labor standards
and hurt our chances of success in disputes.
In addition to its annual report, USTR ensures that Congress has
extensive information on FTA labor issues through regular engagement
with Congress, via meetings and phone conferences. For example, since
2009, there have been 40 labor-related meetings and conference calls
with Congress on Colombia alone. This is part of hundreds of meetings
we have had with Congress on labor issues in FTA and non-FTA trading
partner countries. Indeed, formal reports are not the primary way that
we communicate with Congress. We have very close contact and dialogue
with our committees of jurisdiction and many interested Members. Those
contacts serve as a critical, and in many cases, primary channel of
communication.
USTR's comments above, and the volumes of supporting documents
provided to GAO to date, demonstrate our coordinated and systematic
efforts to monitor and enforce labor provisions in FTA countries where
concerns exist. We respectfully request that GAO update its draft
report to reflect the factual record and we offer U[ resources to help
GAO achieve a more accurate reflection of USTR's and DOL's monitoring
and enforcement efforts.
The Administration will continue to work to ensure that our FTAs
benefit through improved conditions for trade that expand
opportunities for workers and their families, farmers, ranchers, and
businesses, including through a special focus on the fundamental labor
rights enshrined in the FTA Labor Chapters. By increasing respect for
labor rights, we can help ensure the benefits of trade are shared
broadly throughout the United States and our partner countries.
Sincerely,
Signed by:
Timothy M. Rief:
General Counsel:
Footnotes:
[1] A submission on Peru regarding public sector collective bargaining
issues unrelated to those detailed here was resolved in 2012.
[2] Available at: [hyperlink, http://www.gpo.gov/fdsys/pkg/CRPT-
110hrpt421/html/CRPT-110hrpt421.htm]
[3] Hornbeck, The U.S.-Panama Free Trade Agreement, Congressional
Research Service at 29 (November 8, 2012).
GAO Comments:
The following are GAO's comments regarding the Office of the U.S.
Trade Representative's (USTR) letter dated September 16, 2014.
In its letter, USTR questions our evaluation of its monitoring and
enforcement of free trade agreement (FTA) partners' compliance with
their labor commitments and expresses concern that we do not give
sufficient credit to U.S. agencies for their multifaceted work to help
FTA partners comply with their labor commitments. We acknowledge in
our report that the agencies have given, overall, greater political
and organizational priority to monitoring and enforcement of FTA labor
commitments since we last reported on this topic in 2009.[Footnote 88]
The evidence that USTR and the Department of Labor (DOL) provided
demonstrate that their monitoring and enforcement activities have
sometimes led to a strengthening of FTA partners labor laws and
practices that might not have occurred absent these activities.
Nevertheless, we stand by our current assessment that USTR and DOL
have not demonstrated a proactive and systematic approach to
monitoring and enforcing FTA partners' compliance with their FTA labor
commitments, with the exception of a few partner countries.[Footnote
89] On the contrary, the evidence that the agencies provided shows
that USTR's and DOL's approaches and actions are generally ad hoc and
leave important gaps.
Our review focuses on steps that USTR and DOL have taken, with support
from the Department of State (State), to monitor and enforce the labor
provisions in the FTAs. In reviewing USTR's and DOL's monitoring and
enforcement of the provisions in the FTA labor chapters, we looked for:
* evidence that USTR and DOL took steps to ensure that each FTA
partner had the requisite laws in place by the time the President
determined that the FTA could enter into force, as well as:
* evidence that USTR and DOL have taken steps to ensure that the
partners are enforcing their laws and maintaining labor rights in law
and practice since the FTAs entered into force.
Further, because USTR announced in 2009 that it would not wait for
complaints (e.g., labor submissions) to investigate and address
possible inconsistencies with FTA provisions, we looked for evidence
that the agencies had established means or mechanisms to anticipate,
analyze, and resolve problems in the absence of a submission.
We consider the approach to monitoring and enforcement that USTR
outlines in its letter to be broadly compatible with the definitions
of monitoring and enforcement and with the key elements of monitoring
and enforcement that we have identified in our report. That is,
enforcement involves taking action to secure compliance by the
partner, and monitoring and enforcement typically involve six key
steps: (1) gathering and analyzing information, (2) setting
priorities, (3) identifying compliance problems, (4) developing and
implementing responses, (5) taking enforcement actions, and (6)
coordinating with agencies.
Following are specific comments in response to USTR's letter.
Comment 1: Throughout our year-long review process, we requested
documentation of USTR's monitoring and enforcement of labor
provisions. However, USTR provided a large number of documents very
late in the process and provided most documents only after receiving
our draft report. We thoroughly reviewed and considered all documents
that USTR provided and made changes in our report as appropriate to
ensure its accuracy and completeness. Several of these changes are
described in the comments that follow.
Comment 2: The evidence that we obtained from USTR and DOL does not
support USTR's assertion that the two agencies actively and
systematically monitored and enforced labor provisions in all 20 FTA
countries, implementing all of the key elements that we identified,
regardless of whether the country had been the subject of a
submission. USTR and DOL submitted evidence that they had taken some
of these key steps in several FTA partner countries, three of which--
Colombia, Jordan, and Panama--were not the subject of labor
submissions. In addition, to support its technical comments about a
draft of our report, USTR submitted further evidence of certain
proactive steps, which we have incorporated in our report as
appropriate. However, in the absence of evidence that USTR and DOL
have taken steps to analyze and address possible inconsistencies with
FTA labor provisions in most partner countries that have not been the
subject of a labor submission, we could not conclude that the agencies
had implemented a systematic approach to monitoring the implementation
of all labor provisions in all FTAs. Moreover, according to DOL--on
which USTR relies for day-to-day monitoring of the FTA partners--the
division's staff spent 80 percent of their work hours in the past year
monitoring implementation of the Guatemala Enforcement Plan,
addressing submissions for five other countries, and following up on
activities initiated under the Colombia Labor Action Plan. This left
the employees' remaining work hours available to monitor and engage
the other 14 FTA partner countries. With the exception of Colombia,
stakeholders in countries we visited indicated that their recent
interactions with USTR and DOL had been very limited. Stakeholders in
these countries also told us that the FTA labor affairs councils in
their countries had been largely inactive and that the councils'
meetings were considered a formality.
Comment 3: Having reviewed all of the cables that State provided, we
consider them a useful tool for DOL and State to obtain information
about labor conditions in partner countries. Our report acknowledges
that USTR is an addressee on such cables and is generally well
informed about labor conditions in partner countries as a result of
this and other input. Obtaining and analyzing information from
credible sources such as State is integral to completing the first
step of the monitoring and enforcement process.
Comment 4: USTR states that it deploys a range of tools to try to
resolve concerns, whether they were identified formally or informally.
However, we found that USTR's and DOL's approach to addressing
concerns that were identified formally, such as by a submission, is
more systematic than their approach to addressing concerns that they
have identified informally. For example, in responding to a labor
submission, DOL conducts a formal review and issues an official
report, which generally identifies any possible inconsistencies with
labor provisions in the FTA and contains specific recommendations to
resolve the issue. DOL and USTR typically use the report's findings to
further engage with the FTA partner country and develop an action
plan, such as in the case of Guatemala. When they have identified a
concern informally, USTR and DOL may engage with the partner country
to discuss the concern, usually in the context of an established FTA
mechanism such as the FTA labor affairs council or free trade
commission. However, we found that USTR and DOL use these mechanisms
infrequently, and USTR and DOL officials told us that except for a few
high-priority countries such as Colombia, the agencies do not
typically perform in-depth analysis of a partner country's compliance
with its FTA labor commitments unless the country has been the subject
of a submission.
Comment 5: We acknowledge that USTR's work with Colombia did not end
with the ratification of the FTA. We added text to our report to
indicate our concurrence with this point and to illustrate USTR's post-
ratification monitoring and enforcement activities.
Comment 6: We acknowledge that USTR and DOL have engaged extensively
with the government of Colombia to monitor the implementation of the
Labor Action Plan, in the process addressing several of the key
elements of monitoring and enforcement FTAs. However, we cannot
conclude that a systematic approach to monitoring and enforcement
labor provisions is in place, because we did not see evidence of
certain key elements--for example, an approach to respond to
outstanding issues identified since the implementation of the Labor
Action Plan.
USTR also indicates that its level of engagement to monitor and
enforce labor provisions in Colombia is not unique and that USTR and
DOL have engaged with other FTA countries to a similar extent as with
Colombia. However, we did not see evidence of such a level of
engagement with other countries that have not been the subject of a
submission. In fact, DOL reported that in the last year, its
monitoring division staff spent 80 percent of their time following up
on the Colombia Labor Action Plan activities and addressing
submissions.
Comment 7: We do not assume or indicate that a tailored, country-
specific approach to labor monitoring and enforcement is
inappropriate, and we do not exclude such approaches from our
evaluation. We reviewed the documentation that USTR and DOL provided,
looking for evidence that key elements of monitoring and enforcement
have been implemented. We recognize that USTR and DOL have
successfully implemented certain steps, such as gathering information
and identifying compliance problems, using different methods in
different countries. However, we did not see evidence of an
overarching strategy that assures that priorities and problems are
systematically addressed.
Comment 8: We evaluated all evidence that USTR and DOL provided,
including documentation that USTR provided with its technical
comments, and we made changes to our report. Specifically, we
incorporated language acknowledging that in some partner countries,
the agencies took steps before and after FTA ratification that were
consistent with key elements of monitoring and enforcement and that
likely contributed to assuring that the partners met certain labor
commitments.
Comment 9: We acknowledge that the labor submission process is a
central component of USTR's and DOL's approach to addressing possible
inconsistencies with FTA labor provisions in partner countries and
that the agencies have done extensive work to investigate allegations
in the submissions that DOL has accepted. However, in our view,
reliance on labor submissions to assess compliance and take
enforcement actions is inconsistent with USTR's 2009 commitment to no
longer enforce FTA partners' labor commitments "only on a complaint-
driven basis" but instead to "immediately identify and investigate
labor violations."[Footnote 90]
Comment 10: As stated, the report acknowledges that labor submissions
are a key component of USTR's and DOL's monitoring and enforcement of
FTA labor provisions and that the agencies undertake considerable
research and analysis in the process of addressing submissions We
modified the text of the report to clarify that after DOL receives a
submission, it works with USTR and State to engage diplomatically to
address concerns, as well as independently to investigate and analyze
the issues.
Comment 11: We acknowledge that USTR and DOL work together to address
labor concerns identified in submissions and to engage with partner
countries regarding labor matters. Our review of evidence obtained
from the agencies and in FTA partner countries generally confirmed
that USTR and DOL also coordinate on an ad hoc basis. However, the
evidence that we reviewed did not show that the agencies have
developed a coordinated, strategic approach to systematically address
the key steps of monitoring and enforcing labor provisions in all FTAs
and to address labor conditions that may be inconsistent with FTA
provisions, such as the conditions identified in DOL's management
reports. For example, agendas that USTR provided for two meetings of
the interagency Subcommittee on Labor Monitoring and Enforcement list
meeting topics but do not detail expected actions or outcomes; USTR
provided no record, beyond a general description, of what transpired
at the meetings or of any intra-agency correspondence following the
meetings. Further, during our interviews with USTR officials, the
officials discussed items that the interagency process had not
produced, such as up-to-date assessments of risk; agreed-on
priorities; and formal action plans for partners other than Colombia,
Guatemala, and Jordan. For example, USTR officials indicated that a
previous interagency effort to develop a comprehensive risk-based
approach had been overtaken by events and not revised. DOL officials
indicated that in general, there had been no discussion of cross-
agency resource use However, our work on best practices in
collaboration has shown that agencies can enhance and sustain their
collaborative efforts by engaging in the following eight practices:
(1) define and articulate a common outcome; (2) establish mutually
reinforcing or joint strategies; (3) identify and address needs by
leveraging resources, (4) agree on roles and responsibilities; (5)
establish compatible policies, procedures, and other means to operate
across agency boundaries; (6) develop mechanisms to monitor, evaluate,
and report on results; (7) reinforce agency accountability for
collaborative efforts through agency plans and reports; and (8)
reinforce individual accountability for collaborative efforts through
performance management systems.
Comment 12: Our report does not state that USTR should explicitly
accuse partner countries of trade violations in its annual report to
Congress. Our report states that, reflecting in part USTR's and DOL's
limited monitoring and enforcement of these provisions, USTR's annual
report generally does not detail concerns about the implementation of
FTA labor provisions by partner countries that have not been the
subject of labor submissions. Our report also states that appropriate
information resulting from more extensive monitoring and enforcement
could help inform Congress and other U.S. stakeholders about the
extent to which trade partners are fulfilling their FTA labor
commitments.
[End of section]
Appendix VI: Comments from the Department of Labor:
U.S. Department of Labor:
Deputy Undersecretary for International Affairs:
Washington, D.C. 20210:
September 26, 2014:
Kimberly Gianopolous:
Acting Director, International Affairs and Trade:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Gianopolous:
Thank you for the opportunity to comment on the Government
Accountability Office's (GAO) draft report, Free Trade Agreements:
U.S. Partners Are Addressing Labor Commitments, but More Proactive
Monitoring and Enforcement Are Needed. The stated purpose of the GAO
report was to assess the current status of implementation of free
trade agreement (FTA) labor provisions as well as the United States'
and trade partner countries' responses to related challenges. The
Department of Labor (DOL), through the Bureau of International Labor
Affairs' (ILAB) Office of Trade and Labor Affairs (OTLA), is strongly
committed to monitoring compliance with and enforcing FTA labor
commitments and engages regularly with U.S. FTA partners to raise and
address labor issues.
Your report made four recommendations, three of which were made to the
Secretary of Labor and relate to recommended DOL actions:
1. That DOL reevaluate and adjust, if necessary, its FTA labor
submission review time frame to ensure that it more accurately
reflects the time required to thoroughly investigate.
After a coordinated interagency review process involving the Office of
the United States Trade Representative (USTR) and the Department of
State (State), on December 21, 2006, DOL published in the Federal
Register a notice of procedural guidelines regarding the receipt and
review of FTA labor submissions. Under the guidelines, "within 180
days of the acceptance of a submission for review, unless
circumstances as determined by the OTLA require an extension of time,
the OTLA shall issue a public report" with "any findings and
recommendations." When the guidelines were published, DOL had received
labor submissions under only the North American Agreement on Labor
Cooperation (NAALC) and not under FTA labor chapters. However after
reviewing labor submissions under both the NAALC and FTA labor
chapters, DOL recognizes that under the existing internal OTLA
submission review processes, it is difficult, within 180 days, to
conduct a thorough and detailed review and assessment of all of the
information obtained related to the allegations in a submission and
publish a report describing the review and providing "any findings and
recommendations," as called for under OTLA guidelines. As a result,
DOL commits to reevaluate existing internal submission review
processes, in consultation with USTR and State and working closely
with stakeholders, to determine whether internal adjustments may be
necessary to ensure that the process best serves its purpose of
providing the public a mechanism to raise, and have DOL review and
assess, concerns regarding trading partners' compliance with FTA labor
commitments.
2. That DOL take steps to better inform stakeholders in FTA partner
countries about its FT A labor submission process.
DOL makes significant efforts to inform stakeholders in the 19 U.S.
trading partners with FTA labor commitments about our FTA labor
submission process, as well as about our proactive labor-related
engagements with FTA partners on areas of concern identified by
stakeholders and/or uncovered through our monitoring efforts. DOL
regularly shares labor submission procedural guidelines with
stakeholders during visits to trading partner countries engages with
AFL-CIO Solidarity Center representatives in such countries, who in
turn communicate and coordinate with local labor stakeholders,
including in many cases on the FTA labor submission process~ and
refers stakeholders to the procedural guidelines now available in
English, Spanish, Arabic, and French on the recently redesigned and
more user-friendly ILAB website. Nevertheless, DOL acknowledges that
more stakeholder outreach would benefit our existing efforts to
monitor and enforce compliance with FTA labor obligations. We will
evaluate additional available actions to expand our ability to inform
stakeholders in FTA partner countries about the FTA labor submission
process, as well as about our labor-related engagements under FTAs more
generally.
3. That USTR and DOL, in cooperation with State, coordinate their
approaches to monitoring and enforcing FTA labor provisions to ensure
that they proactively assess the consistency of priority FTA partner
countries' laws, regulations, and practices with trade agreement labor
provisions and address any identified concerns.
DOL and USTR, in cooperation with State, regularly coordinate
monitoring and enforcement activities related to assessing and
ensuring the consistency of FTA partner countries' labor laws,
regulations, and practices with FTA labor provisions, both within
and outside the context of labor submission reviews. DOL and USTR, in
cooperation with State, undertake such proactive and coordinated
monitoring and enforcement through formal FTA labor mechanisms,
including Labor Affairs Council and Labor Subcommittee meetings and
direct communications between DOL and trading partners' FTA labor
contact points designated under the FTA labor chapters, as well as
through more informal internal and bilateral activities, including
interagency sharing of country-specific DOL management reports,
interagency monitoring trips, interagency discussions, and wide-
ranging interagency engagement with stakeholders both in the United
States and in trading partner countries. In particular, DOL and USTR,
in cooperation with State, have undertaken extensive proactive
monitoring and enforcement activities in countries where we have
particular existing or potential labor concerns, whether or not
there is a submission under review. All three agencies share
information, collaborate on monitoring and enforcement efforts, and
consult each other on key concerns and responses to ensure proactive
assessment of FTA partner countries' compliance with FTA labor
provisions.
For example, there have been no formal labor submissions under the Fr
As with Colombia, Jordan, or Panama, but DOL and USTR, in cooperation
with State, have been proactively engaged for several years monitoring
labor conditions in the context of FTA labor commitments and working
to resolve identified concerns. Similarly, unrelated to the labor
submission against Peru that was resolved in 2012, DOL and USTR, in
cooperation with State, have engaged with Peru since 2009, with a
particular focus on labor laws, regulations, and practices related to
temporary and subcontracted workers.
* In the case of Colombia, DOL and USTR, in cooperation with State,
began proactively monitoring and assessing Colombian labor laws,
regulations, and practices before the Colombia FTA went into effect,
to identify and address concerns. DOL and USTR, in cooperation with
State, worked with the Government of Colombia to craft the April 2011
Colombian Action Plan Related to Labor Rights (Action Plan), with
concrete Colombian commitments related to the protection of
internationally recognized labor rights and the prevention and
prosecution of violence against labor leaders. DOL and USTR, in
cooperation with State, have monitored Action Plan implementation,
including through formal technical- and high-level meetings required
under the Action Plan and countless informal monitoring calls, emails,
and meetings with counterparts in Colombia. Additionally, from late 20
II through late 2012, DOL detailed a full-time staff person to the
U.S. embassy in Bogota to help facilitate implementation of the
Action Plan; this was the first time DOL has provided for such a
detail in the context of an FTA.
* In Jordan, DOL and USTR, in cooperation with State, negotiated with
the Government of Jordan an implementation plan in January 2013, with
specific measures to be taken by the Government of Jordan, to address
labor concerns regarding foreign workers in Jordan's garment sector,
including concerns related to freedom of association, discrimination
including sexual harassment, and living conditions in worker
dormitories. DOL and USTR, in cooperation with State, have been
monitoring the measures taken by the Government of Jordan under the
plan, including through an inter-agency monitoring trip in June 2014
that included site visits to several garment factories and worker
dormitories.
* Since the Panama FTA entered into force in 2012, DOL and USTR, in
cooperation with State, have proactively monitored the implementation of
Panama's FTA labor commitments. This monitoring included two interagency
trips to Panama City, three interagency videoconferences with the
Government of Panama, and a meeting of the Labor Affairs Council in
Panama City in January 2014, in addition to numerous regular, informal
monitoring calls and emails with counterparts in the Panamanian
government.
* In the case of Peru, DOL and USTR, in cooperation with State, have
proactively monitored Peru's implementation of its FTA labor
commitments since the FTA's entry into force in January 2009, in
particular with respect to temporary and subcontracted workers. USTR
and DOL have taken three trips to Lima, in cooperation with State, and
held several video- and phone conferences with Peruvian officials to
monitor these issues, in addition to regular, informal monitoring
through numerous calls and emails with counterparts in the Peruvian
government and contacts with stakeholders in Peru.
Following GAO's recommendation, DOL will evaluate additional options
to increase our proactive monitoring and enforcement, as well as our
coordination with USTR and State on these issues.
In closing, DOL reiterates our gratitude to GAO for the time and
effort dedicated to reviewing our work to monitor and enforce FTA
partner countries' labor commitments. We appreciate GAO's recognition
that, subsequent to DOL engagement, partner countries including El
Salvador, Guatemala, Colombia, Oman, and Peru, have taken steps to
implement FTA labor commitments and other initiatives to strengthen
labor rights. As we continue to build upon our existing work of
monitoring and enforcing FTA partner countries' labor commitments, DOL
remains committed to using all available mechanisms and processes to
improve global working conditions, raise living standards, protect
workers' ability to exercise their rights, and address the workplace
exploitation of children and other vulnerable populations.
Sincerely,
Signed by:
Carol Pier:
Deputy Undersecretary for International Affairs:
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Kimberly Gianopoulos, (202) 512-8612 or gianopoulosk@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Kim Frankena (Assistant
Director), Francisco Enriquez (Analyst-in-Charge), Juan P. Avila,
Nicholas Jepson, Jill Lacey, Reid Lowe, Grace Lui, and Oziel Trevino
made major contributions to this report.
[End of section]
Footnotes:
[1] For example, FTAs that have entered into force since February 2009
contain a provision stating that "each Party shall adopt and maintain
in its statutes and regulations, and practices thereunder, the
following rights, as stated in the ILO [International Labour
Organization] Declaration on Fundamental Principles and Rights at Work
and Its Follow-up (1998)." For example, see United States-Colombia FTA
(entered into Force May 2012), art. 17.2. According to the Department
of Labor (DOL), freedom of association is the right of workers and
employers to organize to defend their interests, including for the
purpose of negotiating salaries, benefits, and other conditions of
work, and is a fundamental right that underpins democratic
representation and governance; collective bargaining is an essential
element of freedom of association that helps to ensure that workers
and employers have an equal voice in negotiations and provides workers
the opportunity to seek to improve their living and working conditions.
[2] As of July 2014, the United States had entered into FTAs with
Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, the Dominican
Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, South
Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore.
The Dominican Republic-Central America-United States Free Trade
Agreement (CAFTA-DR) covers six of these countries (Costa Rica,
Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua).
[3] Trade Promotion Authority, previously known as "fast track"
negotiating authority, established conditions and procedures under
which the President could submit legislation to approve and implement
trade agreements, such as FTAs, that Congress could approve or
disapprove but could not amend or filibuster. See Bipartisan Trade
Promotion Authority Act of 2002, Pub. L. No. 107-210, Div. B, § 2103,
116 Stat. 933, 1004-08.
[4] GAO, International Trade: Four Free Trade Agreements GAO Reviewed
Have Resulted in Commercial Benefits, but Challenges on Labor and
Environment Remain, [hyperlink,
http://www.gao.gov/products/GAO-09-439] (Washington, D.C.: July 10,
2009). Our 2009 report reviewed implementation of the U.S. FTAs with,
respectively, Chile, Jordan, Morocco, and Singapore.
[5] Additional information about U.S. agencies' monitoring and
reporting on compliance with, and progress under, FTA labor provisions
is presented later in this report.
[6] According to USTR, FTA provisions provide for the FTA's entry into
force through an exchange of formal diplomatic notes among the
parties. USTR also notes that, in the United States, the President
must first determine that the trading partner has come into compliance
with obligations that will take effect when the agreement enters into
force. When an FTA enters into force, it generally means that the
agreement becomes legally binding on the parties to the agreement.
[7] Congressional leaders and the Bush administration jointly agreed
to the May 10th Agreement, resulting in a new trade policy template
that calls for, among other things, (1) enforceable reciprocal
obligation for the countries to adopt and maintain in their laws and
practice the five basic internationally recognized labor principles,
as stated in the International Labour Organization (ILO) Declaration
on Fundamental Principles and Rights at Work and (2) labor obligations
subject to the same dispute settlement procedures and remedies as
commercial obligations.
[8] The views expressed by these officials and organizations cannot be
generalized to all officials or organizations knowledgeable about
labor provisions in the selected FTAs.
[9] All of the selected FTAs contain mechanisms to address matters
arising under the respective labor chapters. CAFTA-DR and the
Colombia, Oman, and Peru FTAs each include labor provisions that state
that each party shall designate an office within its labor ministry
that shall serve as a contact point with the other party and with the
public. Furthermore, the FTAs state that each party's contact point
shall provide for the submission, receipt, and consideration of
communications on matters related to the respective labor chapter and
shall make such communications available to the other party and, as
appropriate, to the public. While either party can request
consultations regarding any matter addressed in the labor chapter, FTA
dispute settlement procedures may be invoked only under specified
circumstances, which vary by FTA.
[10] FTAs with Colombia, Panama, Peru, and South Korea contain
language reflecting the labor provisions of the May 10th Agreement.
[11] United States-Singapore Free Trade Agreement (entered into force
in January 2004), art. 17.2; United States-Chile Free Trade Agreement
(entered into force in January 2004), art. 18.2; United States-
Australia Free Trade Agreement (entered into in force January 2005),
art. 18.2; United States-Morocco Free Trade Agreement (entered into
force in January 2006), art. 16.2; CAFTA-DR (entered into force
between 2006 and 2009 for the various countries), art. 16.2; United
States-Bahrain Free Trade Agreement (Bahrain FTA) (entered into force
in January 2006), art. 15.2; and Oman FTA (entered into force in
January 2009), art. 16.2.
[12] CAFTA-DR, art. 16.6.7; Oman FTA art. 16.6.5.
[13] CAFTA-DR, art. 16.1.1 and 16.6.7; Oman FTA, art. 16.1.1 and
16.6.5.
[14] United States-Peru FTA (entered into force in February 2009),
art. 17.2, 17.3; United States-Colombia FTA (entered into force in May
2012), art. 17.2, 17.3; United States-Korea Free Trade Agreement
(entered into force in March 2012), art. 19.2, 19.3; and United States-
Panama Free Trade Agreement (entered into force in October 2012), art.
16.2, 16.3.
[15] International Labour Organization, Declaration on Fundamental
Principles and Rights at Work and Its Follow-Up (1998), [hyperlink,
http://www.ilo.org/declaration/thedeclaration/textdeclaration/lang--
en/index.htm], accessed August 18, 2014. The principles and rights
stated by the ILO are (1) freedom of association and the effective
recognition of the right to collective bargaining, (2) the elimination
of all forms of forced or compulsory labor, (3) the effective
abolition of child labor, and (4) the elimination of discrimination in
respect of employment and occupation.
[16] United States-Peru FTA, art. 17.7; Colombia FTA, art. 17.7;
United States-Korea Free Trade Agreement, art. 19.7; and United States-
Panama Free Trade Agreement, art. 16.7.
[17] Working Group of the Vice Ministers Responsible for Trade and
Labor in the Countries of Central America and the Dominican Republic,
The Labor Dimension in Central America and the Dominican Republic:
Building on Progress: Strengthening Compliance and Enhancing Capacity
(April 2005), accessed June 7, 2013, [hyperlink,
http://www.ilo.org/sanjose/lang--es/index.htm].
[18] Colombian Action Plan Related to Labor Rights (April 7, 2011),
accessed May 29, 2013, [hyperlink,
http://www.ustr.gov/webfm_send/2787].
[19] These labor initiatives were created outside an FTA framework.
[20] [20] Dominican Republic-Central America-United States Free Trade
Agreement Implementation Act, Pub. L. No. 109-53, 119 Stat. 262 (Aug.
2, 2005).
[21] Under the White Paper, the labor ministers of the six CAFTA-DR
countries agreed to address the following priority areas: (1) labor
law and implementation, (2) budget and personnel needs of the labor
ministries, (3) strengthening the judicial system for labor law, (4)
protections against discrimination in the workplace, (5) worst forms
of child labor, and (6) promoting a culture of compliance.
[22] The nine areas that Colombia agreed to address under the Labor
Action Plan were (1) creation of a specialized Ministry of Labor; (2)
criminal code reform; (3) prohibiting the misuse of cooperatives; (4)
preventing the use of temporary service agencies to circumvent labor
rights; (5) criminalizing the use of collective pacts to undermine the
right to organize and bargain collectively; (6) collecting and
disseminating information on the definition of essential services; (7)
seeking the ILO's assistance in implementing the Labor Action Plan and
working with the ILO to strengthen its presence, capacity, and role in
Colombia; (8) reforming protection programs; and (9) criminal justice
reforms.
[23] 19 U.S.C. § 2171. Generally, the trade agreements program
includes all activities consisting of, or related to, the negotiation
or administration of international agreements that primarily concern
trade and that are concluded pursuant to the authority vested in the
President by the Constitution, 19 U.S.C. § 1351, the Trade Expansion
Act of 1962, and the Trade Act of 1974 as amended.
[24] In addition, DOL is responsible for convening the FTA labor
affairs councils among partner government's labor ministries, which
oversee the FTA labor chapters, and for administering the U.S. Labor
Advisory Committee for Trade Negotiations and Trade Policy. The
committee consists of representatives of labor organizations and is
tasked with providing information and advice with respect to
negotiation and implementation of U.S. trade agreements. DOL also
administers the National Advisory Committee for Labor Provisions of
U.S. Free Trade Agreements, which consists of 12 representatives (4
from the business community, 4 from the labor community, and 4 from
the public sector).
[25] Department of Labor, Progress in Implementing Chapter 16 (Labor)
and Capacity-Building under the Dominican Republic-Central America-
United States Free Trade Agreement (Washington D.C.: May 11, 2012).
According to DOL, this report relies on information collected by the
ILO as part of its project to verify the results of actions taken to
address the White Paper recommendations.
[26] Stakeholders reported challenges related to the issuance of
fines, as discussed later in this report
[27] Mutually Agreed Enforcement Action Plan between the Government of
the United States and the Government of Guatemala (2013), accessed
August 1, 2013, [hyperlink,
http://www.dol.gov/ilab/programs/otla/guatemalasub.htm].
[28] The commitments outlined in the Enforcement Plan are (1) reaching
an interagency information exchange agreement, (2) providing police
assistance for Ministry of Labor inspectors, (3) allocating resources
for Ministry of Labor enforcement of labor laws, (4) allowing for the
ministry to issue fine recommendations and expedited judicial review,
(5) standardizing time frames for Ministry of Labor inspections, (6)
ensuring labor law compliance for certain enterprises, (7) ensuring
labor law compliance for enterprises receiving export benefits, (8)
ensuring labor law compliance upon enterprise closure, (9) employer
substitution, (10) developing a system for tracking compliance with
court orders, (11) verifying employer compliance with court orders,
(12) monitoring judicial enforcement of court orders, (13) applying
certain labor code articles, (14) ensuring transparency and tripartite
coordination on Enforcement Plan implementation, (15) publishing labor
law enforcement statistics and data.
[29] According to DOL, associated work cooperatives are self-governed,
autonomous enterprises, under which associated workers are considered
cooperative owners, rather than workers, and are excluded from many
Labor Code protections.
[30] According to DOL's 2011 Labor Rights Report on Colombia, until
late 2010, penalties for the misuse of cooperatives to avoid direct
employment relationships were not enforced against third-party
employers. According to DOL, as a result, cooperatives became a
vehicle widely used by employers to end direct employment
relationships with their workforces while retaining the same workers
through cooperatives and continuing to act as their de facto employers.
[31] This amount includes both FTA and non-FTA labor-related
assistance provided to FTA partner countries. This amount does not
include labor-related technical assistance to Oman that DOL provided
for a joint project in Oman and Bahrain. DOL's records show that it
obligated $758,000 for the project in 2006 but do not show how the
funds were divided between the two countries, because, according to
DOL, standard financial reports for federal grants to more than one
country do not allow the grantor to report amounts received by each
country. In addition, this amount excludes any assistance provided
under the United States-Israel Free Trade Agreement (Israel FTA),
which does not contain a specific article on labor provisions, and the
North American Free Trade Agreement (NAFTA), which addresses labor-
related issues under a related agreement, the North American Agreement
on Labor Cooperation.
[32] This amount excludes the Israel FTA and NAFTA.
[33] Beginning in 2005, Congress appropriated funds for labor-capacity-
building activities relating to the free trade agreements with the
countries of Central America and the Dominican Republic. For example,
see Consolidated Appropriations Act, 2005, Pub. L. No.108-447, §570,
118 Stat. 2809, 3026 (2004).
[34] According to USTR, as of September 2014, this bill had not been
passed by the Guatemalan congress.
[35] For more information about the status of implementation of the
Guatemala Enforcement Plan, see appendix III.
[36] According to U.S and Guatemalan officials, as well as union
representatives and the ILO, violence against unionists has occurred
in Guatemala. The government of Guatemala reported that it had taken
steps to address the violence. However, stakeholders were unsure of
the extent of the problem because of a lack of statistics collected by
the government. For more information about violence against unionists
in Guatemala, see appendix II.
[37] According to DOL, Colombia's Minister of Labor heads SENA's board
of directors.
[38] According to DOL, a simplified stock company is a corporate model
that holds shareholders liable only up to the amount of their
investment. DOL further stated that these companies are easy to create
and dissolve and are a legitimate business model in Colombia. In cases
where a simplified stock company is used for contracting--either legal
or illegal--an employer hires the company to carry out a task and the
company provides the labor through its own employees.
[39] In addition, although murders of unionists have generally been
decreasing over the past 10 years, and despite actions by the
Colombian government to reduce homicides of union members and labor
activists, stakeholders we interviewed reported that violence against
unionists continues. For a more detailed description of reported
violence against union members and activists in Colombia, see appendix
II.
[40] According to State, Peru's nontraditional export sectors include
fishing, wood and paper, nonmetallic minerals, jewelry, textiles and
apparel, and the agriculture industry.
[41] According to DOL officials, DOL also received a sixth submission,
filed under the Costa Rica FTA in July 2010, which the filing party
withdrew before DOL decided whether to accept it. DOL has also
accepted other labor submissions under the North American Agreement on
Labor Cooperation (one of three accords supplementary to NAFTA), which
we did not examine.
[42] 71 Fed. Reg. 76691 (Dec. 21, 2006).
[43] DOL has also accepted other labor submissions under the North
American Agreement on Labor Cooperation (one of three accords
supplementary to NAFTA), which we did not examine.
[44] DOL may extend the timeframe if it determines that the
circumstances require such an extension. 71 Fed. Reg. 76691.
[45] GAO, Auditing and Financial Management: Standards for Internal
Control in the Federal Government, AIMD-00-21.3.1 (Washington, D.C.:
Nov. 1, 1999).
[46] The American Center for International Labor Solidarity, better
known as the Solidarity Center, is a nonprofit organization affiliated
with the AFL-CIO labor federation whose mission is to help build a
global labor movement by strengthening the economic and political
power of workers around the world through effective, independent, and
democratic unions.
[47] [hyperlink, http://www.gao.gov/products/AGO/AIMD-00-21.3.1].
[48] U.S. Department of Labor, Submissions under the Labor Provisions
of Free Trade Agreements, accessed Aug. 5, 2014, [hyperlink,
http://www.dol.gov/ilab/trade/agreements/fta-subs.htm]. See also, 71
Fed. Reg. 76691.
[49] The labor chapters of some FTAs call for the establishment of a
bilateral labor affairs council to oversee, and review progress in,
implementation of the labor chapter's provisions.
[50] In commenting on a draft of this report, DOL noted that during
its submission review, the partner government has the opportunity to
provide input and DOL visits the partner country and reviews any
information that the partner government provides. DOL also noted that
the submission review process is a fact-finding exercise intended to
evaluate the merits of allegations raised in a submission and that
acceptance of a submission for review does not imply that the
allegations are correct. In addition, DOL stated that its decision to
review a public submission does not indicate any determination as to
the validity or accuracy of the allegations contained in the
submission; instead, the submission's merit is addressed in the public
report that follows DOL's review and analysis. According to DOL, after
its submission review report is issued, USTR and DOL engage with the
partner country to address any recommendations in DOL's report and to
attempt to find a mutually agreeable solution to any potential
violation of FTA labor provisions.
[51] For information about USTR's and DOL's efforts to monitor
Guatemala's and Colombia's implementation of other labor initiatives,
see appendix III.
[52] [hyperlink, http://www.gao.gov/products/GAO-09-439].
[53] Office of the U.S. Trade Representative, "Ambassador Kirk
Announces New Initiatives for Trade Enforcement" (press release), July
16, 2009, accessed July 18, 2013, [hyperlink,
http://www.ustr.gov/about-us/press-
office/speeches/transcripts/2009/july/ambassador-kirk-announces-new-
initiatives-trade].
[54] See GAO, International Trade: Strategy Needed to Better Monitor
and Enforce Trade Agreements, [hyperlink,
http://www.gao.gov/products/GAO/NSIAD-00-76] (Washington, D.C.: March
2000).
[55] [hyperlink, http://www.gao.gov/products/GAO/NSIAD-00-76]. To
identify these five steps, we reviewed agency records and interviewed
agency officials and staff at several U.S. agencies.
[56] [hyperlink, http://www.gao.gov/products/GAO-09-439].
[57] For information about other steps that DOL took in response to
our 2009 report's recommendations, see [hyperlink,
http://gao.gov/products/GAO-09-439].
[58] Appendix III also discusses the agencies' efforts to monitor
implementation of the CAFTA-DR White Paper and the Guatemala
Enforcement Plan.
[59] See figure 1 for information about U.S. agencies' cooperative
project funding by FTA partner. In comments on a draft of this report,
USTR indicated that 12 of the 20 FTA partners have received, or are
expected to receive, some technical assistance from State or Labor.
[60] USTR divided the existing TPSC Subcommittee on Labor to form the
Subcommittee on Labor Monitoring and Enforcement and the Subcommittee
on Labor Policy and Negotiations.
[61] In addition, according to USTR, the subcommittee is responsible
for satisfying public reporting requirements and making eligibility
determinations tied specifically to labor standards, such as those in
specific preference programs. According to USTR, other TPSC
subcommittees may also address enforcement of labor provisions.
[62] USTR staff noted that they also receive information about labor
conditions in partner countries from the subcommittee as well as by
other means, such as direct coordination with DOL and State staff,
discussions with stakeholders such as unions and advocacy groups,
communication with FTA partner government officials, and reviews of
State cables and reports and news articles.
[63] According to DOL, the labor affairs councils for the Singapore
and Australia FTAs have not met since the FTAs went into effect (in
2004 and 2005, respectively). The labor subcommittee (which serves the
same purpose as a labor affairs council) for the Jordan FTA has met
twice since the FTA took effect, and the labor affairs councils under
the remaining FTAs have each met once. The last labor affairs council
meeting under CAFTA was in 2008. According to DOL staff, meetings of
the labor affairs councils under the Morocco and Peru FTAs have been
planned. The labor chapters of the Israel FTA and NAFTA did not
provide for labor affairs councils.
[64] According to DOL staff, DOL has been monitoring compliance with
FTA labor provisions since NAFTA entered into force in 1994. Before
DOL established the Monitoring and Enforcement of Trade Agreements
Division, the Trade Agreement Administration and Technical Cooperation
Division, in the Bureau of International Labor Affairs' Office of
Trade and Labor Affairs, oversaw administration of FTA labor
provisions.
[65] According to DOL, the Monitoring and Enforcement of Trade
Agreements Division also monitors implementation of FTA labor
provisions and other labor conditions through phone calls, e-mails,
and interactions with numerous stakeholders, as well as through
periodic visits to partner countries, as resources allow.
[66] The five FTA labor submissions exclude any submissions that DOL
has received under the North American Agreement on Labor Cooperation.
[67] These eight practices are as follows: (1) define and articulate a
common outcome; (2) establish mutually reinforcing or joint
strategies; (3) identify and address needs by leveraging resources;
(4) agree on roles and responsibilities; (5) establish compatible
policies, procedures, and other means to operate across agency
boundaries; (6) develop mechanisms to monitor, evaluate, and report on
results; (7) reinforce agency accountability for collaborative efforts
through agency plans and reports; and (8) reinforce individual
accountability for collaborative efforts through performance
management systems. GAO, Results-Oriented Government: Practices That
Can Help Enhance and Sustain Collaboration among Federal Agencies,
[hyperlink, http://www.gao.gov/products/GAO-06-15] (Washington, D.C.:
October 2005). An updated version of this guidance is available at
[hyperlink,
http://www.gao.gov/key_issues/leading_practices_collaboration/issue_summ
ary].
[68] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1].
[69] In January 2012, DOL accepted a labor submission for Mexico under
the North American Agreement on Labor Cooperation.
[70] DRL also includes a position of Special Representative for
International Labor Affairs, which State reported to be vacant during
the time of our review.
[71] Section 163 of the Trade Act of 1974, as amended (19 U.S.C. §
2213), requires the President to annually submit to Congress the Trade
Policy Agenda and the Annual Report of the President of the United
States on the Trade Agreements Program. The President delegated this
function to USTR in 2004. 69 Fed. Reg. 10133 (Mar. 1, 2004). The
President is required to submit a biennial report about labor issues
for CAFTA-DR. 19 U.S.C. § 4111(a). This function was delegated to DOL
in 2008. 73 Fed. Reg. 38297 (June 30, 2008). State is required to
report to Congress annually about human rights in every country
worldwide. 22 U.S.C. §§ 2151n and 2304. The Trade Act of 1974 (19
U.S.C. § 2464) requires the President to submit an annual report to
Congress on the status of internationally recognized worker rights
within each beneficiary developing country (i.e., countries that
benefit from U.S. trade preferences), including the findings of the
Secretary of Labor with respect to the beneficiary country's
implementation of its international commitments to eliminate the worst
forms of child labor. According to DOL, this commitment historically
has been fulfilled by State's Human Rights Reports and DOL's Trade and
Development Act of 2000 reports on child labor.
[72] 19 U.S.C. § 4111(a).
[73] Of the countries we selected for our review, violence against
unionists was reported only in Colombia and Guatemala.
[74] ENS and Colombia's Prosecutor General's Office have used
different methodologies to determine whether a victim was murdered
because of union affiliation. In some cases, ENS has considered a
murder union related, while the Prosecutor General's Office has
classified the murder as unrelated to union activities. For more
information on the differences in data collection methodologies, see
Congressional Research Service, U.S.-Colombia Free Trade Agreement:
Labor Issues, RL34759 (Washington, D.C.: January 2012).
[75] We did not determine the cause of the variation, because it was
beyond the scope of our work.
[76] A commission of inquiry, the ILO's highest-level investigative
procedure, is generally established when a member state is accused of
committing persistent and serious violations and has repeatedly
refused to address them. According to DOL, as of August 2014, 12
commissions of inquiry had been established.
[77] As a result of a 2006 agreement between the United Nations and
the government of Guatemala, CICIG was established as an independent
international body designed to support the Guatemalan Public
Prosecutor's Office, National Civil Police, and other government
institutions in the investigation of crimes committed by members of
illegal security forces and clandestine security structures and, in a
more general sense, to help disband such groups.
[78] International Labour Organization Governing Body, Complaint
Concerning Non-Observance by Guatemala of the Freedom of Association
and Protection of the Right to Organise Convention, 1948 (No. 87),
Made by Delegates to the 101st Session (2012) of the International
Labour Conference under Article 26 of the ILO Constitution,
GB.320/INS/9 (Mar. 19, 2014).
[79] The Guatemalan Attorney General's Office stated that extinction
of criminal liability is defined as an instance in which the
government is unable to prosecute as a result of the death of the
offender.
[80] International Labour Organization Governing Body, Complaint
Concerning Non-Observance by Guatemala of the Freedom of Association
and Protection of the Right to Organise Convention.
[81] Working Group of the Vice Ministers Responsible for Trade and
Labor in the Countries of Central America and the Dominican Republic,
The Labor Dimension in Central America and the Dominican Republic:
Building on Progress: Strengthening Compliance and Enhancing Capacity
(April 2005), accessed June 7, 2013, [hyperlink,
http://www.ilo.org/sanjose/lang--es/index.htm].
[82] Colombian Action Plan Related to Labor Rights (April 7, 2011),
accessed May 29, 2013, [hyperlink,
http://www.ustr.gov/webfm_send/2787].
[83] These labor initiatives were created outside an FTA framework.
Consequently, matters arising from these initiatives would not be
addressed through the dispute settlement provisions of an FTA.
[84] Mutually Agreed Enforcement Action Plan between the Government of
the United States and the Government of Guatemala (2013), accessed
August 1, 2013, [hyperlink,
http://www.dol.gov/ilab/programs/otla/guatemalasub.htm].
[85] According to DOL, its funding for the ILO Verification Project in
2007 and subsequent years totaled $11.6 million. According to ILO
staff, the Verification Project represents one of the ILO's most
comprehensive evaluation efforts in the region.
[86] DOL has also accepted other labor submissions under the North
American Agreement on Labor Cooperation, which we did not examine.
[87] Pursuant to the Bahrain FTA Labor Chapter, parties may only have
recourse to dispute settlement under the FTA for matters arising under
the commitment to not fail to effectively enforce its labor laws,
through a sustained or recurring course of action or inaction, in a
manner affecting trade between the parties. Seeking recourse through
the dispute settlement chapter of the FTA could lead to the imposition
of a monetary assessment or other trade measures. Matters arising
under the other commitments in the labor chapter cannot have recourse
to dispute settlement under the FTA, but parties are entitled to
request consultations on any matter arising under the chapter in an
effort to find a mutually agreeable solution. Bahrain FTA, art. 15.6
and ch.19.
[88] GAO, International Trade: Four Free Trade Agreements GAO Reviewed
Have Resulted in Commercial Benefits, but Challenges on Labor and
Environment Remain, [hyperlink,
http://www.gao.gov/products/GAO-09-439] (Washington, D.C.: July 10,
2009).
[89] At the same time, we stand by our prior decision to close
recommendations from our 2009 report because USTR and DOL had taken
steps to increase engagement with all FTA partners on labor matters
and to identify and address labor compliance concerns in several
partners.
[90] Office of the U.S. Trade Representative, "Ambassador Kirk
Announces New Initiatives for Trade Enforcement" (press release), July
16, 2009, accessed July 18, 2013, [hyperlink,
http://www.ustr.gov/about-us/press-
office/speeches/transcripts/2009/july/ambassador-kirk-announces-new-
initiatives-trade].
[End of section]
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U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, DC 20548.
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